By the end of this year, North China’s Shanxi, now China’s largest coal mining province, aims to build facilities to safely store another 23 million tonnes of coal, according to a recent notification from the province’s Energy Administration. Of this new capacity, 3 million tonnes will be for coal stored under government deployment, similar to a state stockpile, while another 20 million tonnes of capacity for commercial coal will be built and managed by coal miners and traders, Mysteel Global understands.
The new storage capacity will be for all varieties of coal, though chiefly thermal coal, with the construction aimed at strengthening the management of coal storage and to ensure energy security. The scheme is also part of China’s national plan to establish a nationwide network of facilities capable of storing 120 million tonnes under government supervision within this year.
The task of storing the 3 million tonnes of government-deployed coal will be equality divided, with 1.5 million tonnes assigned to the eleven city governments in Shanxi while the four province-owned coal mining groups will oversee the construction of space to store 1.5-2 million tonnes, the announcement explained.
For example, Shuozhou city, Shanxi’s largest coal mining hub, was assigned the task of establishing 250,000 tonnes of new storage capacity, while the province’s largest miner, Jinneng Holding Group, must look after 1-1.3 million tonnes, the Shanxi Energy Administration noted. The province’s existing coal storage capacity was not revealed in the notification.
The construction will be concentrated mainly at coal mining, coal consumption or transportation hubs, according to the provincial administration. No details were given regarding the facilities’ structural requirements but according to previous environmental regulations, storage areas for coal are required to be covered to reduce dust, Mysteel Global notes. All city energy administrations in Shanxi are ordered to determine a minimum stock level for the new government-supervised deployment.
In parallel, all electricity generation plants are ordered to secure (and store) the minimum volume of coal stocks they need on hand. During peak seasons for coal consumption such as in summer and winter, thermal coal stocks at these plants must be equivalent to no less than seven days of consumption. For off seasons, the sustainable period will be no less than 15 days, according to the notification.
Chinese coal prices have soared this year because of the tightness of supply. During this year’s January-June half, the average assessed price for Mysteel’s 5,500 kcal/kg Shanxi blend thermal coal had jumped 50% on year to Yuan 810.9/t ($125.5/t) at Qinhuangdao port. Mysteel’s national composite coking coal price swelled too over the same period, rising by 13% on year to Yuan 1,224.2/t including the 13% VAT on average.
