China Coal Buying Spree Lifts Prices Across Asia on Winter Chill
(Bloomberg) -- Coal prices from Australia to China have advanced as the world’s largest energy user boosts imports and burns more of the fuel used for electricity generation and heating amid freezing temperatures.
Futures on the Zhengzhou Commodity Exchange climbed to an intraday record on Monday, while thermal coal at the Australian port of Newcastle has advanced the past three weeks to trade near $100 a ton. Stockpiles held by China’s six major power producers for this time of year dropped to the lowest level last week in at least four years, according to estimates from Macquarie Group Ltd.
Chinese authorities have ordered some regions to revert to burning coal after shortages of natural gas left people without heating. The nation boosted imports in November, with purchases rebounding from a three-month low as power providers seek to replenish inventories ahead of peak winter demand.
See also: Thermal Coal to Normalize Between $70-$80 During 2018, Citi Says
Futures added as much as 0.9 percent to 689.8 yuan a ton on the Zhengzhou Commodity Exchange, the highest level since September 2013. Benchmark Qinhuangdao coal prices have climbed 0.7 percent the past two weeks to 613 yuan a ton, the highest since Nov. 6, according to data from the China Coal Transport & Distribution Association.
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