Chinese coal futures delivered their biggest weekly rise on record, driven by a worsening energy crisis that threatens to pile further pressure on the country’s property developers as they grapple with looming debt payments.
Thermal coal futures traded on the Zhengzhou Commodity Exchange rose 8 per cent on Friday to Rmb1,692 ($263) a tonne, taking them 34 per cent higher over the past five sessions and marking the largest weekly gain since they began trading in Zhengzhou in 2013. China’s coal futures have closed every trading day this week at a record.
The rally comes amid a mounting energy crisis in China, where coal-fired power accounts for about 70 per cent of electricity generation. A drive to close coal mines and power plants over environmental and safety considerations, along with local governments’ efforts to reduce power usage to meet strict emissions targets, have combined to produce power shortages and blackouts across the country.