An indicator of China’s coal demand surged almost a third above levels last year as hotter-than-usual weather and factories rushing to make up for lost orders boosted power demand, spurring a rebound in prices. Coal use by coastal power plants at five major utilities rose for an eighth day to 577,100 tons as of Monday, more than 30% higher than the same period last year and the most since Jan. 12, data from China Coal Transport & Distribution Association showed. The figure eased slightly to 562,300 tons Tuesday.

 

China is recovering from the slump in February when much of the domestic economy was shut to curb the spread of the coronavirus. Factories and companies are now back to work, but restrictions to contain the outbreak in other countries have weighed on export orders and disrupted supply chains. Meanwhile, more than 100 meteorological observatory stations across the nation tested record high temperatures in early May.

“Bulls are coming back to the thermal coal contracts as demand finally shows some strength after factories and businesses resumed operations,” Wang Miao, an analyst with Huatai Futures, said by phone. “Although there are still uncertainties ahead, such as the extent of the virus impact on overseas orders, market sentiment has markedly improved.”