China calls for coal transportation to be strengthened to secure supply

September 29, 2021

BEIJING (Reuters) – China’s top economic planner said on Wednesday that railway companies and local authorities should strengthen coal transportation in key areas including the northeast region and ensure stable supply for power generation.

The National Development and Reform Commission (NDRC) sent local economic planners, energy administrations and railway companies a notice urging them to reinforce coal transportation to secure enough supply to meet residents’ heating demand during the winter season.

Local economic planning departments should encourage medium- to long-term supply contracts of thermal coal that have a guarantee of transport capacity, the NDRC said.

“Each railway company should strengthen coal transportation to power houses with inventory of less than seven days and launch the emergency supply mechanism timely,” said the NDRC.

The notice comes as the world’s second-largest economy grapples with a power shortage, which has halted plants in major industrial hubs and spilled over into the residential sector in parts of the northeast regions.

The state planner asked railway firms to secure coal transportation in key producing regions including Shanxi, Shaanxi and Inner Mongolia as well as the northeastern provinces, and to prioritise the transportation of coal used in heating and power generation.

It also urged local governments to closely monitor the supply, demand and inventories of coal at power plants.

The most-traded thermal coal futures on the Zhengzhou Commodity Exchange surged as much as 6.9% to 1,377 yuan ($8,903.98) per tonne in early trade on Wednesday.

($1 = 0.1547 Chinese yuan renminbi)

(Reporting by Min Zhang and Ryan Woo; Editing by Christopher Cushing and Ana Nicolaci da Costa)

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