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Mar.28.2024 1USD=7.0948RMB
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China Urges Power Plants to Increase Coal Inventories

https://en.steelhome.com [SteelHome] 2021-04-21 10:32:47

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China's top economic planner asked domestic power plants to strictly implement the minimum coal inventory system, ensuring their stockpiles enough to cover more than 20 days of use in off-peak seasons, according to a document issued recently, as part of a drive to guarantee sufficient supply and stabilize prices of the fossil fuel.

The standard was set for most power plants. For a few power plants with special difficulties, their stockpiles should reach 15 days of use.

The National Development and Reform Commission (NDRC) asked power plants to exert differentiated inventory standards in off-peak and peak seasons. Over peak seasons like in the summer when air conditioning demand increases, most power plants should keep stockpiles above 15 days of use, while those with difficulties should maintain above seven days.

The minimum coal inventory system is part of the NDRC's target to develop a vast coal storage system in the supply chain. By end-2021, the country's top planning agency aimed to build up state-governed coal reserves of above 120 million tonnes at major coal mines and utilities, and another 400 million tonnes of commercial storages, including 200 million in utilities, 100 million at mines and 100 million at circulation links.

The document stressed the state-governed and commercial storages should not be double-counted or included in each other.

Currently, coal stockpiles at power plants in the eight provinces totaled 22.61 million tonnes, enough to cover 12.5 days of use, which came 37.5% lower than the off-peak standard set by the NDRC.

Low inventories have pushed utilities to speed up restocking. Spot thermal coal prices are currently at 771 yuan/t FOB at northern ports, on 5,500 Kcal/kg NAR basis, according to Fenwei's assessment. Offer prices for this grade have exceeded 800 yuan/t after rising for nearly a week.

Source from SXCOAL

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