Authorities in China's largest coal-producing province Shanxi are urging producers to increase flood safety precaution measures amid heavy rainfall, which are expected to curb supplies when utilities are restocking to meet high summer demand.
Heavier rainfall in north China in recent weeks is raising concerns that coal mines could be exposed to floods. Authorities in Shanxi are urging mines to adopt stronger flood precaution measures such as enhanced inspections and drills, which could reduce output at a time when Beijing is urging domestic producers to increase output to meet summer demand.
China is now entering the peak summer demand season for power consumption, with several southeast provinces reaching historical highs in their power use. This could increase even further next month when temperatures are expected to increase further. Domestic coal output is particularly critical for China's summer restocking this year because of curbs on imported coal.
But China is unlikely to face significant shortages in coal supplies because supplies from Inner Mongolia, which was replaced by Shanxi as China's largest coal-producing province based on January-June output data, could increase now that a corruption investigation that began in March and has curbed output is coming to an end.
Authorities in Inner Mongolia's coal producing region of Ordos are pushing for output increases to help cope with rising summer demand.
Increased hydropower output in many parts of China because of higher water levels following the heavy rain could reduce coal consumption even if power demand rises. China produced 12.15TWh of hydropower during June, an increase of 6.9pc from June 2019, according to data from coal industry association the CCTD.
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