Power Coal Prices Rise to New High in Communist China, Coal and Power Stocks Plunge

【Japan Himalaya League】 Author: 子辰  Translator: Ranting

The price of power coal in the Communist China is rising again this week, hitting a record high, the Epoch Times reported on Oct. 13. The A-share coal and power sectors plunged in response to this.

Since August this year, many parts of the Communist China have repeated the power restrictions and blackouts of December 2020, and this time the power supply crunch involves a wider scope, covering about 20 provinces and cities.

Previously in late September to early October, there have been a number of provinces and cities to raise the price of electricity. For example, Guangdong, Zhejiang, Guangxi plans to increase the peak hour electricity prices; Inner Mongolia, Ningxia, Shanghai, Hunan price increase measures are used as the price of coal to set the parameters of electricity prices.

Power restrictions in some areas are still escalating after the long October holiday in the Communist China, for example, Zhejiang Province has upgraded its power restriction level from B to C since October 8.

According to Reuters analysis, the recent floods in the coal-producing province of Shanxi have exacerbated the problem of tight coal supply, once leading to the suspension of production at 60 coal mines.

(Picture Source: Internet.)

During the period, the Shanxi provincial government said that there are still four coal mines in the province that have not yet been restored, with a total annual production of 4.8 million tons. Three of the coal mines are located in Linfen City, the reason for the shutdown is that the water surge is still not completely removed; the other is located in Taiyuan City, the reason for the shutdown is the interruption of coal transportation channels due to landslides.

Affected by the price increase of power coal, the mainland coal sector led the A-share decline on the 13th, plunging more than 6%, the sector’s net outflow of 2.376 billion yuan of main funds. By the end of the day, Hengyuan Coal and Electricity, Lu’an Ring Energy, Lutian Coal and many other stocks fell.

The same period in the power coal continued to rise in price, coal stocks plunged, and coal-related power stocks on the 13th while plunging, down nearly 5%, many power stocks fell.

Currently, the Communist China is facing a tight coal supply and soaring coal and electricity prices.

Post Script: This article only represents the view of the author.

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Posted by: Ranting

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