<article><p class="lead">A snow storm that hit north China's Inner Mongolia region last week has disrupted coal production and transportation. This, coupled with increasing demand, has been pushing domestic coal prices higher. </p><p>The energy administration of Inner Mongolia, which runs China's major coal-producing region, conducted safety checks earlier this week at mines in the Wulagai and Baiyinhua areas in Xilinguole county to identify potential snow-related risks. </p><p>The administration asked mine operators to evacuate workers and take precautions to prevent accidents. Operators cleaned the snow and spread anti-slip material at the mines. </p><p>Xilinguole had an operating coal production capacity totalling 169mn t/yr as of early 2019. This includes a few open-cast mines that could be affected by the snow.</p><p>Slippery snow-bound roads in Inner Mongolia now have also disrupted logistics, reducing coal transported by trucks from mines in the region. </p><p>The supply cuts caused by the snow are much less significant compared with the shortfalls created by the government's tighter controls on sales permits this year. A few mines remain closed because of a lack of sales permits issued for the rest of this year. </p><p>Major Inner Mongolia-based private-sector producer Yitai has just raised its asking prices for coal by a further 5-13 yuan/t ($0.80-2) on a fob mine basis in response to short supply. This comes immediately after its price increase of Yn3-21/t earlier this week.</p><p>Overall coal prices at ports in north China kept increasing on the back of tight supply and stronger demand driven by a cold snap. Coal burn at Zhejiang Power, a major power generator in east China, surged to a three-month high of 150,000 t/d yesterday, as cold and rainy weather boosted power demand to heat homes.</p><p>Coal stocks at Zhejiang Energy dropped to a 3½-month low of 3.56mn t yesterday, amounting to around 24 days of coal burn. This suggests that the utility may increase restocking from the domestic market, especially while China continues to curb Australian coal imports.</p><p>Mine operations and coal transportation in Inner Mongolia are recovering, as the snow has eased today. But demand is likely to stay strong as temperatures are expected to keep declining in many Chinese regions. </p><p>Bids for NAR 5,500 kcal/kg coal were at around Yn618-620/t fob ports in north China today, while offers for the coal were at around Yn623-625/t fob. Both bids and offers have indicated a rise in overall prices from the last <i>Argus</i> assessment of Yn614.42/t fob Qinhuangdao on 20 November.</p></article>
