China: Coal and power: The situation gets worse

July 4, 2004

Coal and power stocks in China have fallen to their lowest level in 20 years. The catastrophic forecasts on effects of an overheated economy are coming true showing how much more the government has to do to cool down.

The National Information Centre said that, at the end of April, coal stocks had fallen to 98 million tonnes, down from 103.5 million at the end of February and the lowest level in nearly 20 years.

Most critical are coal stocks at power stations, which on May 7 fell to 7.71 million tonnes, enough for just 7.41 days of operations. In the first five months of the year; despite national output of electricity was 817.6 billion watts, up 16.1 per cent from the same period last year it is not enough to keep pace with demand.

As a result, shortages that began in 2002 have worsened. The number of provinces and regions hit by shortages rose from 11 in 2002 to 21 last year and 24 in the first half of this year. The shortfall this summer is likely to reach 30 million kilowatts, triple that of last year.

The Shanghai Electricity Company reported that demand last Friday was of 13.66 million kW, against a maximum capacity of 10.63 million kW. This record because of high temperatures and strong demand for air conditioners.

The government has ordered 500 major industrial consumers to operate at night, which is freeing 240,000 kW during daytime hours, and other companies to adjust their production schedules, which is freeing 560,000 kW.

The National Information Centre blamed the shortages on a surge in consumption of more than 20 per cent by big users such as the steel, cement and construction materials industries, an inadequate transmission network and low coal prices.

Meanwhile, Oil imports continued to soar. In the first four months, imports of crude products and oil products rose 33.3 per cent to 40.14 million tonnes and oil products by 65.1 per cent to 12.68 million tonnes.

Stocks of many industrial goods continued to increase because of power shortages. At the end of March, stocks of steel products at the 66 largest manufacturers were 43 per cent higher than at the end of December. Vehicle stocks at 13 major state producers at the end of April were worth 14.2 billion yuan, an increase of 28 per cent over a year earlier.


Tags: Coal, Consumption & Demand, Fossil Fuels