China Is Using More Coal Again. This Time It May Be a Good Thing

(Bloomberg) -- China is burning more coal in yet another sign that the first country hit by a coronavirus outbreak is returning to a level of normalcy.

Daily coal burn at select coastal plants has doubled from early February, at the height of the country’s lockdown to stop the spread of Covid-19. The plants are responding to resurgent electricity demand as factories restart in the world’s second-largest economy.

China’s use of coal is usually cause for consternation. The country mines and burns about half the world’s supply of the dirtiest fossil fuel, and it’s the primary reason China leads the world in carbon emissions. In fact, China’s shutdown to slow the spread of the virus probably kept about 1.5 billion tons of carbon dioxide out of the atmosphere, at least temporarily.

Still, with Europe and the U.S. now in the grips of a similar lockdown and the global economy in tatters, signs that China is stirring back to life a little over two months since the outbreak are a beacon to the rest of the world.

“If the coal burn data can sustain above current levels and continues to rise, then it shows work resumption has normalized,” said Wang Miao, an analyst at Huatai Futures.

Coal use by the coastal power plants of five major Chinese utilities reached 488,800 tons last week, more than double from a low on Feb. 10, according to China Coal Transport & Distribution Association. The number was 471,000 tons on Tuesday.

The association typically publishes coal burn data from six big power groups. However, China Guodian Corp. hasn’t provided an update since late January. The remaining five are China Huaneng Group, China Datang Corp., Zhejiang Zheneng Electric Power Co., Guangdong Energy Group and Shanghai Electric Power Co.

More than 90% of markets, shops and malls in China and 70% of small- and medium-sized businesses have reopened as of mid-March, according to consultancy IHS Markit. China Railway has resumed work on about 93% of its major construction projects.

The consultancy said China’s power demand has already started to show year-on-year growth in March following an unprecedented slump in the first two months, according to a report Monday.

©2020 Bloomberg L.P.