Jieeselee.online - China's coal shortage is easing thanks to new government policies, the Commonwealth Bank of Australia said in a note on Tuesday, according to CNBC.
According to the report, the number of Chinese provinces with severe power shortages fell to two by mid-October - down from 18 at the beginning of the month. The bank said that was based on a supply-to-demand shortfall of more than 10%.
“The number of coal power plants with dangerously low coal inventories (less than seven days) has also fallen by 90% in the same time frame,” the analysts said.
China's coal shortage worsened in September, prompting local authorities to abruptly announce power cuts to many plants. As a result, factory output fell, prompting some economists to reduce their forecasts for GDP growth.
The official Purchasing Managers' Index, a measure of manufacturing activity, contracted in September and October. Third-quarter GDP came in weaker than analysts had expected and many banks were out. cut their full-year growth forecast.
However, in the weeks since then, Chinese authorities have sought to address the coal shortage with measures ranging from addressing speculation in coal futures prices to allowing more coal to be produced than ever before. despite pressure to meet carbon emissions reduction targets.
The immediate power shortage prompted the authorities to take a different approach to coal development to ensure energy supply.
In mid-October, the People's Bank of China said financial institutions should not "blindly" cut loans to coal projects.
At the same time, China's State Administration for Coal Mine Safety said that national coal production could increase by about 600 tons a day, with a total output of 55 million tons in the fourth quarter.
China also buys coal to make up the shortfall. The country's fossil fuel imports jumped 76% in September from a year ago.
Imports of thermal coal, the main fuel for power generation, have increased - especially from Russia and Indonesia.
Since the government fixed electricity prices in China, power producers in China have struggled to operate due to rising costs due to high coal prices.
In mid-October, China's national economic planner said it would allow the market to play a larger role in setting electricity prices, and has repeatedly said over the past few weeks that it will prevent investment. coal prices.
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