Coal Prices in China surged to record levels on Tuesday, 19 October, a crisis that is characterised by China's power crunch and cold weather, Reuters reported.
The report added that coal prices have risen more than 260% year to date, and that the price of delivery in January is 1,982 yuan per tonne.
The approaching winter is also playing a key role in this crisis.
With a drop in temperatures, the demand for power will rise, contributing to the spike in the price of coal, since most of China's energy is derived from coal.
With world economies and the Chinese economy opening up after ending lockdowns that were induced by the COVID-19 pandemic, China has been facing a power crunch due to rise in coal's demand from steel, aluminium and other industries, while failing to proportionately increase the supply.
The Chinese government has taken some steps to address the coal supply issue, like allowing coal plants to put the burden of costs onto some customers in order to incentivise them to produce more power.
Responding to the crisis, the daily output of coal recently reached 11.5 million tonnes, a 1.2 million tonne increase from last month, according to a Yahoo News report.
(With inputs from Reuters and Yahoo News.)
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