BEIJING: China’s coal production in January and February fell 4% from the previous year as high stockpiles and forecast lower prices up a damper on mining output.
China, the world’s largest producer, mined 705.27 million metric tons of coal in the first two months of the year, the National Bureau of Statistics said on Monday, down from 734.23 million in the corresponding 2023 period.
China releases combined data for January and February to account for distortion caused by the irregular timing of the week-long Lunar New Year holiday, which fell in February this year.
Two China-based traders, who declined to be named because they were not authorised to speak to the media, said the decline was expected as mines had been cutting back on production.
Some mines also took a longer than usual break for the Lunar New Year because stockpiles are at such a high level, one of the traders said.
The other trader said mines were trimming their production plans in expectation of lower prices. A series of accidents has also weighed on production as local regulators have instituted stricter safety curbs.
Power sector: contributions of Sahiwal coal-fired power plant
Last month, regulators in China’s largest coal mining province of Shanxi told miners to curb production in a bid to prevent serious accidents.
Fatalities, which are not uncommon in coal mines, surged over 50% in the northern province last year.
Despite the curbs, two more accidents occurred in Shanxi and the eastern Anhui province, killing at least 12 people on March 11.
Dennis Ip, an analyst with Daiwa Capital Markets, said in a client note last week that the fatalities posed an “increased possibility” that production controls could spread to other provinces, because they occurred during China’s most important political meeting, the March 5-11 National People’s Congress (NPC), or parliament.
Shanxi’s vice governor also told the parliamentary meeting in early March that the province would “stabilise” coal production this year, unlike 2023 when provincial officials targeted an increase of 60 million tons.
Total national coal output reached a record high of 4.66 billion tons last year amid a push to ensure energy security.
Source: Brecorder
