China amends its power crunch battles by ordering its two top coal sectors to increase their production and allowing them to inflate coal-fire power utility prices. The country's top two major coal production regions, Shanxi and Inner Mongolia, will order its coal miners to increase the combined annual production capacity by more than 160 million tonnes.
FREMONT, CA: China will overcome its worst power crunch battles by ordering its two top coal sectors to increase their production besides allowing them to inflate coal-fired power utility prices. High thermal coal prices and electricity shortages have affected power rationing across China, which resulted in a fall in the country's industrial output. These prices will be kept stable for residential and agricultural users and changed accordingly to prevent high energy consumption.
The country's largest coal-producing region, Shanxi, ordered its 98 coal mines to raise the annual output capacity by 55.3 million tonnes at the end of the year. Accordingly, Inner Mongolia, China's next highest coal-producing region, received an urgent notice from its energy department on Oct 7, asking local authorities to notify 72 mines to operate at stipulated higher capacities immediately. Furthermore, the regional authorities held a meeting after this notice in order to plan out actions for the winter energy supply.
Additionally, the county allowed its 51 coal mines that achieved their maximum annual output levels to continue production in the fourth quarter and raise capacity by eight million tonnes, which may bring up the output by 20.65 million tonnes. The government will also improve its coal imports after the rate fell nearly ten percent in the first eight months of 2021. On the contrary, coal consumption will increase in northeastern China during winter. Despite the gradual increment in the fourth quarter, analysts from Guosheng Securities anticipate China's thermal coal shortage to continue till 2022.