China increases imports of natural gas and coal, prices to be cut in half from 2023

China has increased imports of coal and natural gas so far this year, and is planning to stockpile fuel for power plants for the summer as international prices for the first four months of 2024 are half of what they were last year.

China's natural gas imports rose 21% year over year from January to April, and coal imports increased 13%, according to data reported by Bloomberg on Monday.

According to Bloomberg, the benchmark LNG price in Asia was just over $9 per million in the first quarter of 2024, while the average LNG price for delivery to North Asia in the first quarter of last year was $18 per mmBTU.

Coal prices also fell, and the average price of Australia's Newcastle coal futures, which is a major exporter of coal, in the first quarter of 2024 was 127 dollars per ton. This is almost half of the average price of $236 per ton from January to March 2023.

China's increase in coal imports so far this year has betrayed previous expectations that the Chinese government would level off coal purchases in 2024.

An executive of China's state-owned power company Guangdong Energy Group said in March that China's coal imports this year are expected to reach record levels in 2023.

However, according to last month's data, China's offshore coal imports increased 17% in the first quarter.

China's coal production has been sluggish since the beginning of this year in response to the fact that several fatal accidents have occurred at Chinese mines in recent months, and in response to the fact that the authorities in northern Shanxi Province, which is the largest coal-producing region, cut production volumes for miners in February and ordered them to carry out safety inspections between March and May.

According to the plan announced by the Shanxi provincial government, coal production in Shanxi Province this year is expected to drop 4% for the first time in 7 years due to sluggish coal prices and demand, and mine closures due to safety inspections.