Coal futures in China have reached a record high after flooding in China’s central Shanxi Province shut dozens of mines and caused over 100,000 people to be displaced, slowing supply from the country’s main fuel source for electricity and aggravating a global energy crisis, reports the Financial Times.
Coal futures traded on the Zhengzhou Commodity Exchange climbed 11.6% to close at an all-time high of RMB 1,408.20 ($218.74) a tonne on Monday. The CSI Coal index of big miners listed in Shanghai and Shenzhen rose 3.7%, partly reversing losses from last week, when official orders to boost coal production sent prices tumbling.
Flooding over the weekend piled further pressure on Beijing to contain a growing energy crisis that threatens to undermine the recovery of the world’s second-largest economy. The majority of China’s domestic coal comes from Shanxi, neighbouring Shaanxi province and the Inner Mongolia region.
Other local factors, including an anti-corruption campaign in the coal industry and mine closures to reduce air pollution around national events, have led to power rationing for industrial and, in some cases, residential users.