Coal imports by China held near the highest level in four years, underscoring buoyant demand in the world’s largest user even as lower domestic prices and a weaker currency hurt the appeal of overseas supplies.
Foreign purchases fell just 1.1 percent in August to the equivalent of 925,161 metric tons a day, compared with 935,806 the previous month, the highest since January 2014, according to Bloomberg calculations based on customs data released Saturday. Shipments gained 14.7 percent to 204 million tons in the first eight months of the year
While slumping domestic coal prices and the currency’s longest run of monthly declines since 1994 would have made overseas cargoes more expensive, the strong imports suggest that concern over faltering demand in the summer months might have been overblown. Daily thermal coal use by China’s major power generators averaged 769,000 tons in July to August, typically a peak demand season, slightly above the levels last year.
“Coal demand in China remained robust last month at the height of summer,” Zeng Hao, an analyst at Shanxi Fenwei Energy Information Services Co., said before the data.
Demand for imports could see some support from government inspections of coal mines, which would crimp domestic output. China embarked on a monthlong inspection of local coal mines on Aug. 20, a move that’s already helped futures on the Zhengzhou Commodity Exchange rebound from a low of 573.4 yuan a ton early August to 629.4 yuan as of Friday.