China is paying the most on record for the dirtiest type of coal, showing how the power crisis is turbo-charging Asian energy markets.
The price of a variety of lignite coal from Indonesia surged to $110 to $120 a ton this week due to rising demand from China and falling production from mines in Kalimantan, said traders who buy and sell the grade. That’s up from last year when some shipments sold for as little as $20 to $25 per ton.
The increase in demand for what’s regarded as one of the world’s most pollutive and energy-inefficient fuels is raising concerns about a jump in carbon emissions from China this winter. The grade, known as 4200-GAR, is usually mixed with more energy-efficient coal.
Chinese buyers were out in full force earlier this week to bid for shipments of the Indonesian coal grade, the traders said. Beijing’s order for state-owned companies to secure energy supplies for the winter at all costs is likely to see buying activity intensify.
The supply of 4200-GAR — which is usually used as a cheaper blend-stock for high-quality, costlier varieties of thermal coal and fed into boilers — has been crimped this year due to flooding in Kalimantan. Indonesia is China’s biggest supplier of thermal, or power-station, coal.
