Chinese coal traders are rushing to the small town of Ganqimaodu on the Mongolian border to cash in on imports as prices of the fuel have soared nearly 40 percent in a month after mine safety checks crimped supply while industrial demand is rising. The dash to secure Mongolian supplies illustrates coal’s continued preeminence in the energy mix of China, the world’s biggest consumer of the fuel. The increasing imports also reflect the country’s appetite for foreign supplies even as domestic coal output has climbed to a record so far in 2022.

Thermal coal coal price at Qinhuangdao, main port for loading northern Chinese supplies onto ships bound for users in south, have climbed to 1520 yuan a ton last week compared to about 1080 yuan in late August, according to three China-based coal traders. Traders can make about 200 yuan per tonne in profit after bringing Mongolian fuel to northern Chinese ports, said one of the traders, who is based in the Inner Mongolia region where Ganqimaodu is located, and has recently struck deals in the town.

Trade between China and Mongolia has suffered since the COVID-19 pandemic, with  transport restrictions cutting coal exports from one of the world’s top 10 producers. Daily coal imports via Ganqimaodu averaged about 90,000 tonnes in September, up  19 percent from August, according to the traders, though the volume is still only half the level before curbs on trucks started.

Traders are leveraging all their personal connections and bidding high to secure more supply now as they know this might be a short-lived chance to make profit,” said one of the traders of the appetite for Mongolian coal.