(Bloomberg) -- China’s coal production is facing disruptions because of Covid-19 lockdowns and environmental inspections, undermining Beijing’s plans to significantly ramp up output of the fossil fuel.

A temporary lockdown imposed on Tangshan, an industry-heavy city in northern Hebei province, is creating logistical problems for delivering fuel to factories. At the same time, major coal areas are facing constraints from month-long environmental checks starting from this week, with several miners cancelling night shifts to ease up on full-capacity operations. 

China is pushing for a massive increase in domestic coal production as it prioritizes energy security to limit disruptions to economic growth. Beijing last week ordered power providers to sign long-term supply contracts with miners and build up inventories to last at least 15 days. China’s top economic planner also set a new cap for prices, in an effort to guide the coal market to stable levels after supply shortages last year caused prices to soar.

But strict measures to stamp out Covid are frustrating efforts by power firms to replenish stockpiles. The lockdown in Tangshan, home of the country’s biggest steel mills and coal ports, has halted truck deliveries because of blocked roads in the city, according to the Ordos coal trading center. 

Meanwhile, some coal providers may hold onto limited amounts of spot supplies, reluctant to take bids at lower-than-expected prices. The benchmark price set for March and April is 720 yuan ($113) a ton at port. That’s a discount to China’s benchmark thermal coal futures, which rose for the sixth straight day on Wednesday, closing at 878.6 yuan.

The surge in coal prices last year has hit energy providers hard. One of the country’s biggest firms, Huaneng Power International Inc., reporting a 2021 net loss of 10.26 billion yuan on Tuesday. 

©2022 Bloomberg L.P.