cross-posted from: https://lemmy.sdf.org/post/56904976

Coal demand and prices in China have jumped in recent days as scorching heat waves across most of the country boost electricity demand.

The benchmark spot coal prices at the port of Qinhuangdao have erased a slump from earlier this month and are on track for further increases in the coming weeks amid intense heat, according to the China Coal Transportation and Distribution Association.

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Most of central and eastern China are in the grip of high summer temperatures, while northeastern China, including the large cities of Beijing and Shenyang, is expected to see unusually high temperatures into this weekend.

Heat waves are also depressing hydropower output and wind power generation, which China will have to partly offset with increased coal consumption.

China’s coal inventories are sufficiently high, but its domestic production has seen setbacks since the deadliest mining disaster in 16 years in May prompted authorities to step up safety checks and order suspension of activities in a number of mines in the Shanxi region.

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Meanwhile, thermal coal futures climbed to around $134 per ton in late July, reaching more than one-month highs as coal demand in China strengthened after a relatively mild start to summer gave way to hotter weather, boosting air conditioner use and electricity consumption.

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[While China recently announced that it generates less than half of its electricity from coal, the countries coal consumption is set to rise.]

Chinese authorities are not restricting coal power growth in the new five-year energy plan as Beijing doubles down on the fossil fuel as a “bottom-line guarantee” of the electricity system amid rising shares of renewable power.

[According to the five-year plan, coal consumption in China will rise by 8-10%. China is already the world’s larges coal producer and consumer.]