August 8, 2018 / 4:00 AM / a year ago

UPDATE 2-China July coal imports highest in years as heatwave fuels demand

* Temperatures soar in western, southern China - CMA

* Jump signals customs eased up on checks that slowed arrivals

* China’s year-to-date coal imports up 15 pct (Adding detail, comment)

By Muyu Xu and Josephine Mason

BEIJING, Aug 8 (Reuters) - China increased its coal imports in July by 14 percent to their highest in 4-1/2 years, official data showed on Wednesday, as rising temperatures boosted demand for coal-fired power to run air conditioners in the world’s top buyer of the fuel.

Arrivals came in at 29.01 million tonnes last month, the General Administration of Customs said. That is the highest since January 2014.

Imports rose 23.9 percent from 25.47 million tonnes in June and climbed 49.1 percent from 19.46 million tonnes in July 2017.

Electric power loads on the transmission grid in parts of China soared late last month because of high temperatures, with southern areas of the Hebei province that surrounds Beijing reporting record demand and the State Grid Corporation of China warning of power shortages.

The China Meteorological Administration has been issuing regular heat alerts over the past few weeks. On Wednesday, it warned regions in western and southern China could see temperatures reaching as high as 40 degrees Celsius (104°F), which would continue to support demand for coal-fired electricity.

Increased buying of foreign shipments has also been spurred by curbs on domestic output as Beijing increases checks on heavy industry to clear air pollution.

Thermal coal prices for delivery in September were up 0.1 pct to 614.2 yuan per tonne before the lunchtime break on Wednesday after earlier hitting 623.2 yuan, the highest since July 13.

The data is also another signal that customs has relaxed its checks on foreign shipments, which had slowed arrivals earlier this year.

Cheng Gong, coal analyst at Zheshang Securities, said imports were higher than he expected.

“The authorities have vowed to ensure coal supplies and keep prices running smoothly during the peak season, therefore checks on imports could not be tightened in the short term,” he said.

Year-to-date imports were up 15 percent at 175 million tonnes.

Stockpiles at three major coal ports in northern China rose 0.9 percent to 2.51 million tonnes as of Aug. 3 from the prior week, according to data compiled by data supplier Wind. Stocks at six major utilities added 391,000 tonnes last week to 15.35 million tonnes.

The figures include lignite, a type of coal with lower heating value that is largely supplied by Indonesia.

For more details, click on (Reporting by Josephine Mason and Muyu Xu; Editing by Christian Schmollinger and Richard Pullin)

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