China faces coal shortage as import restrictions, tighter environmental checks begin to bite
- China has imposed caps on coal imports through quotas and quality restrictions in recent months, which has seen import growth to decline since May
- Authorities have used the restrictions to manage domestic demand, but areas like the country’s frigid northeast face shortages as winter approaches
China, the world’s largest producer and consumer of coal, is facing a supply shortage heading into winter amid tighter restrictions on imports, including a reported freeze on coal from Australia.
Analysts said China’s domestic coal production has slowed this year, while demand has surged because of large-scale infrastructure development to steady its coronavirus-damaged economy.
Overall supply of coal is tight due to the import restrictions and recent safety and environmental inspections, analysts said, with the shortage felt most prominently in the northeast of China.
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China, which has a state-subsidised central heating system for homes in the north, is likely to burn more coal over what is expected to be a colder than usual winter.
The National Climate Centre has forecast an average drop this year of 2 degrees Celsius (35.6 Fahrenheit) in the northeast – the coldest part of the country – compared to last year.
Ye Chun, a deputy secretary at the China Electricity Council, which represents the power industry, estimated the northeast could have a shortfall in thermal coal of about 37 million tonnes.
“On the whole, the situation of coal security this winter is not optimistic,” Ye was quoted as saying last month in China Energy News, a publication owned by the state-backed People’s Daily.