Coal Price Surge Chokes Chinese Industry

Power shortages helped drive down China's economic growth to its slowest in a year while surging coal prices at the start of the week threaten more pain for Chinese industry and global supply chains, Kevin Yao, Muyu Xu, and Jason Hovet reported for Reuters.

Photo Insert: China's coal output was 334.1 million tons last month, down from 335.24 million tons in August and 0.9% lower than a year earlier

Companies in Europe have trimmed outlooks amid global bottlenecks, while European gas prices, still more than 350% higher than at the start of 2021, have forced more power supply companies across the region to buckle.

The Czech Republic's energy regulator took the exceptional step of asking suppliers to provide reassurances that they could supply power to homes and companies after another of the country's electricity and gas groups halted supply.

Suppliers in other European markets, including Britain, have also folded in recent weeks because of the energy price surge. In Asia, power provider Ohm Energy said on its website that it had exited the retail electricity market in Singapore on Friday, the third company to do so in recent weeks.

To ease China's crisis, Beijing has taken a raft of steps to boost the output of coal, which fuels about 60% of its power plants. But data on Monday showed those steps were taking time to feed through while demand for power continued to surge.

China's coal output was 334.1 million tons last month, down from 335.24 million tons in August and 0.9% lower than a year earlier, official data showed.

That means September output averaged 11.14 million tons a day, Reuters calculations showed, compared to figures China released last week saying daily output was more than 11.2 million tonnes, only slightly higher despite Beijing's efforts.

"The Chinese government is losing the battle to control soaring coal prices," said Alex Whitworth, head of Asia Pacific power and renewables research at Wood Mackenzie.

"Despite efforts to increase coal supply, output fell in September due to weather, safety, and logistics challenges. Neither has China succeeded in reining in booming power demand."

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