Beijing will boost coal stockpile ahead of summer

BEIJING: Beijing will boost thermal coal supplies to ensure prices return to a "reasonable" level and raise inventories in preparation for higher summer demand, the government said on Tuesday amid concerns about deepening losses at the nation's utilities.

The statement comes after a meeting between the country's state economic planner, the National Development and Reform Commission (NDRC), and utilities on April 14.

It is the strongest sign yet that Beijing is seeking to prevent a potential coal supply crisis in the world's top user of the fuel during the hot summer months when power demand increases.

Citing discussions at the internal meeting, the NDRC said the top five power companies have seen more losses in the first quarter due to the high cost of coal and lower electricity prices as part of China's push to liberalise power prices. Combined profits the top five power companies in the first quarter declined almost 120 percent versus the year ago period.

The commission add that the risk of overcapacity within the power sector continues to grow as the utilization rate of power stations goes down.

The NDRC forecasts electricity consumption to grow 5 percent in the second quarter, down from the first quarter.