China's power generators well prepared for surging winter demand

Beijing Gas Blue Sky Holdings

21/12/2023 10:52

BEIJING, Dec 21 (Reuters) - Ample heating fuel stocks
from bumper production mean China may not need to ramp up
imports of coal and natural gas to meet record power loads as a
result of freezing weather which continues to grip the country.
    Domestic heating demand has risen across China, with many
northern provinces rewriting records as temperatures plunged
below minus 30 degrees Celsius in some cities. 
    Peak electricity loads were up by 100 million kilowatts on
last year's high, Xinhua reported on Thursday. This equated to
an increase of around 8.6%, Reuters calculations based on data
from China's state planner showed.
    China's State Council urged state-owned enterprises to boost
energy supplies to cope with the elevated household demand.
    China's daily coal production hit a record level of 13.8
million metric tons in November, while imports jumped nearly 35%
on last year to build stocks ahead of the winter heating season.
    Thermal coal inventories at key power generating companies
stood above 200 million metric tons, a record high and up from
170 million tons a year ago, official data showed.
    Similarly, domestic natural gas production for January to
November was up 6% from last year, while natural gas imports
jumped 6% to the highest level since January 2022 last month.
    While high inventories and strong production mean that
generators are likely adequately stocked to cope with the cold
wave, the surge in heating demand could nonetheless provide a
small boost to imports, traders said.
    "Apart from driving a spike in thermal power generation for
heating, the cold spell, which is also hampering domestic road
transport of coal,  may prompt some last-minute re-stocking,"
said a senior Chinese coal trader based in Singapore.
    Several gas utilities such as Beijing Gas and Shenzhen
Energy bought spot cargoes of liquefied natural gas (LNG) over
the past week or so at prices under $12 per million British
thermal units (mmBtu) on delivered basis, traders said. 
    However, the purchases were driven more by bargain hunting
than demand, as Asian spot LNG market remained well supplied
with little fresh enquiries from across North Asia, they said.  
  

 (Reporting by Andrew Hayley in Beijing and Aizhu Chen in
Singapore; additional reporting by Emily Chow in Singapore;
Editing by Alexander Smith)
 ((Andrew.Hayley@thomsonreuters.com;))