Dry CargoGreater China

China to build 100m ton coal stockpile this year

China’s National Development and Reform Commission (NDRC) has announced that it plans to build up around 100m tons of deployable coal reserves this year.

“It is extremely rare for the Chinese government to make statements on building up coal reserves, and this adds to our bullishness for the dry bulk shipping market and seaborne coal market,” commented Jefferey Landsberg, managing director of Commodore Research & Consultancy.

Concerns for both summer and winter coal shortages have continued to intensify

Precise details on the source of the reserves have not been released, but the NDRC has also stated it expects both domestic coal output and imports will increase in the near term. Research from Commodore shows China’s power plant stockpiles are down year-on-year by about 25%, while coal-derived electricity production this quarter has been rising year-on-year by approximately 10%. At the same time, domestic coal production has stayed under government-mandated pressure as accidents and deaths at coal mines have continued to occur in recent months.

Coal port stockpiles in China have also now fallen to the lowest level since February.

“Concerns for both summer and winter coal shortages have continued to intensify in China, and we believe substantial strengthening in coal import demand will occur very soon,” Landsberg predicted.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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