China is Hoarding Coal Ahead of Summer Demand Peak

Bloomberg reported this week that China had accumulated inventories of 162 million tons of coal over the first five months of the year.

• Last year, global operating coal capacity increased by 2% as the world added a total of 69.5 gigawatts of coal power.
• China continues to lead the world in both wind and solar capacity, as well as coal capacity.

China, the world’s biggest investor in and generator of wind and solar power has been stocking up on coal in anticipation of peak demand during the summer.

Now, the move is about to start paying off as temperatures rise and so does demand for cooling. After several years of coal shortages during peak demand season, this year may be the first year that China avoids one.

Bloomberg reported this week that China had accumulated inventories of 162 million tons of coal over the first five months of the year, equal to about 8.5% of consumption during those five months, per data from cqcoal.com.

The increase came from both domestic production and imports. The former actually fell in the first quarter of the year after a series of fatal incidents prompted shutdowns and investigations in China’s coal country—the Shanxi province. Output ramp-up only began this month, but demand for coal has offset the effect of the temporary shutdowns thanks to a surge in hydropower generation following abundant rainfall.