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The price of coal with an energy value of 5,500 kilocalories per kilogram rose 2 percent at Qinhuangdao, the country’s largest port for the fuel, in the week to May 17, according to data from the China Coal Transport and Distribution Association today. Coal was sold for 755 to 765 yuan ($112) a metric ton, the data showed.

China, the world’s biggest producer and consumer of coal, started building reserves after a six-month-long drought in the southwest cut hydropower generation and increased demand from coal-fired plants, depleting inventories.

Thermal coal stockpiles at Qinhuangdao stood at 4.88 million tons as of May 7, according to Shanghai Steelhome. Inventories had fallen 44 percent between March 19 and April 30, the data showed.

China’s eastern province of Shandong has ordered power plants to increase coal stockpiles to 30 days of consumption from 15 days before summer, Xinhua News Agency said on May 13.

--Editors: Ryan Woo.

To contact the reporter on this story: Baizhen Chua in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.

Sourced from www.businessweek.com