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 |