China coal futures hit record highs on strong electricity demand

September 08, 2021 11:55 AM AEST | By Team Kalkine Media

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China coal futures hit record highs on strong electricity demand — Image source: © Bakhtiarzein | Megapixl.com

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Highlights

Thermal coal prices rose on Tuesday.

China wants to reduce its reliance on coal-fired power plants for electricity.

Coal production in China in 2021 was up at a compound annual rate of 4.1%.

Coal prices in China have climbed to record-high levels despite a check from the government towards the use of coal in power plants to reduce greenhouse emissions. On Tuesday, the most traded thermal coal futures on the Zhengzhou Commodity Exchange hit US$150 per tonne, significantly up from the previous year's prices of US$85 per tonne.

The skyrocketing prices of coal are an indication of the clash between China's rising electricity demand and the government's push to increase reliance on renewables. As per the data from the National Bureau of Statistics, the coal production in 2021 was up at a compound annual rate of 4.1% relative to the previous corresponding period.

Bottom Line

Coals prices in China rose to record high levels despite the country’s government wants to reduce the usage of coal for electricity generation due to environmental concerns.

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