China’s coal prices pushed toward record level as electricity consumption soars amid rising temperatures
- The power load in the eastern province of Zhejiang near Shanghai surpassed 100 million kilowatt-hour on Tuesday for the first time
- Electricity usage also hit records in Jiangsu and the southern region of Guangdong, where temperatures have reached as high as 37 degrees Celsius
A heatwave across some of China’s biggest industrial provinces has pushed local electricity consumption to unprecedented levels, sending thermal coal futures toward record highs.
The power load in the eastern province of Zhejiang near Shanghai surpassed 100 million kilowatt-hour on Tuesday for the first time, the State Grid said in its newspaper.
Usage has also hit records in nearby Jiangsu and the southern region of Guangdong, where temperatures have reached as high as 37 degrees Celsius (99 degrees Fahrenheit).
The excessive demand boosted Chinese thermal coal futures to the highest in two months, briefly topping 900 yuan (US$139) a tonne in early trading Friday. Futures have rallied more than 30 per cent this year, reaching a record in May, amid a supply shortage.
China’s efforts to limit the use of the dirtiest fossil fuel have been thwarted as hot weather raises air conditioning needs
“Southern China has been very hot, and the daily power load is consistently breaking new highs,” said Huatai Futures analyst Wang Haitao. “Although the supply of coal has increased, that’s hard to sustain given the intense draw-down. Some regions are again rationing electricity and issuing warnings about using coal.”
Pressure on the nation’s electricity sources is resurfacing with the onset of summer, which meteorologists have said may be hotter than usual this year.