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Coal Rises to Record in China as Floods Keep Supply Tigh

Coal Rises to Record in China as Floods Keep Supply Tigh

(Bloomberg) -- Chinese thermal coal futures extended gains to another record as the country’s mines grapple with the impact of heavy rains in key producing regions.

Floods have hampered supply from mines in Shanxi, Shaanxi and some other regions, putting further pressure on energy supply during a power crunch that’s posing a threat to the nation’s economy. China mines and burns more than half the world’s supply, and the fuel accounts for more than 60% of the country’s electricity generation. 

Coal futures on the Zhengzhou Commodity Exchange rose as much as 8.8% Wednesday to 1,640 yuan ($254.30) a ton, a new intraday record for the most-active contract.

China’s supply squeeze “may ease during October but the country still needs more supplies for December and January when the weather could be the coldest,” Bloomberg Intelligence analyst Michelle Leung said in a Tuesday note.

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