Coal news and updates

China’s Coal Shortage Means Higher Prices for the World

China, the world’s top coal consumer, is in dire need of more supply and is willing to pay any price -- a move that threatens to leave less fuel for energy-starved rivals.

With winter on the way for much of the world and natural gas prices at record levels, economies across the globe are competing for a finite supply of coal. At the center of the scramble is China, where stockpiles are low and demand is at an all-time high. The dirtiest fossil fuel, which was struggling against cleaner energy sources, is now seeing its biggest comeback ever, complicating international climate talks set to begin in just a few weeks.

China will expand coal procurement at “any price to ensure heating and power generation in winter,” the China Electricity Council said in a statement on Monday. While more than 90% of the fuel the country uses is mined locally, it’s difficult to raise local output at short notice.

European coal has risen to a 13-year high, and Australian Newcastle coal has more than tripled over the past year to within range of the record set in 2008. Chinese thermal coal futures on the Zhengzhou Commodity Exchange rose as much as 3.6% Wednesday to reach an intraday record for a third straight session.

A few months ago, Chinese buyers were on the sidelines of the spot market, complaining about prices being too high and noting that they could weather the storm with domestic inventories, according to traders with knowledge of the matter. Now those buyers are singing a different tune, as power plant operators have turned frantic, asking traders and importers to source overseas cargoes, they said.