BEIJING (Reuters – China’s imports of coal increased 43% in April compared to March. The increase was driven by panic buying due to fears of disruptions due Russia’s invasion Ukraine.

Data from the General Administration of Customs revealed that China exported 23.55 Million Tonnes of coal last month. Comparable to 16,42 million tonnes of coal in March and 21,73 million tonnes April 2021, this figure is quite significant.

China imported 75.41 millions tonnes of coal in the January-April period, which was 16% less than the shipments of the same time last year.

China’s coal imports https://graphics.reuters.com/CHINA-COAL/IMPORTS/gdvzyagexpw/chart.png

In March Benchmark Newcastle’s thermal coal reached a new record of $440 per tonne. This was driven by worries about tight supplies as Western countries threatened to place sanctions on Russia’s financial system, and its energy products following the invasion of Ukraine. Moscow refers to its actions against Ukraine as “special operations”.

While global coal prices were high, the Chinese central government instructed miners to increase domestic production and limit local prices. Chinese traders then opted for domestic resources over expensive seaborne cargoes.

China plans to produce a record 12.6 Million Tonnes of coal per day. It also wants to maintain the coal price under terms contracts at 570-770 Yuan ($84.99-114.81) per tonne.

In April, Guangdong and Guangxi were urged by the nation’s State Planner to make longer term agreements with top mining centers Shanxi Shaanxi Inner Mongolia in order to increase domestic coal supply.

A flare-up in COVID-19 could result in a reduction of imports.

Data compiled by Wind revealed that the coal stock at Chinese power plants and in coastal Chinese provinces reached about 30,000,000 tonnes in April. That compares with an average of 25 million tonnes between 2016-2021.

China’s finance minister has reduced import tariffs on all kinds of coal by zero, from May 1, 2022 to March 31, 2023. This is to increase energy security in a world where prices are soaring, though traders worry that it may drive up imports.

($1 = 6.7066 yuan)