BEIJING: China’s coal production in April fell to its lowest level since Oct 2022, statistics bureau data and Reuters records showed on Friday, as continuing mine safety inspections curbed output.
Output was 371.67 million metric tons last month, down 2.9% from a year earlier, according to the National Bureau of Statistics.
That was also down 7% from March. Lower output from China’s coking coal hub of Shanxi weighed on output after the local government ordered a series of safety checks during March-May following an uptick in deadly accidents, and told miners to curb excess production.
The province mined 29% of China’s coal last year.
Domestic coal prices were also likely their lowest for 2024 in April, according to the China Coal Transportation and Distribution Association (CCTD), leaving miners with little enthusiasm to ramp up production.
Sliding coking coal prices put pressure on steel, iron ore
China’s production will likely remain below year-earlier levels in May-June before seeing an uptick in July as safety inspections ease, and due to improved demand, said a Shanghai-based analyst who requested anonymity because he was not authorised to speak to the media.
Industry experts say production at Shanxi’s coal mines will be a deciding factor in overall industry output this year.
Shanxi has set a production target that is about 4% lower than 2023, but it may struggle to increase output enough in the remaining months of the year to hit that target, the Shanghai-based analyst said.
Output at Shanxi’s mines was down 18.9% year-on-year in the first quarter, the most recent period for which statistics bureau data is available.
Production cuts in Shanxi were evenly balanced between thermal coal used in power plants and coking coal used for making steel, the analyst added.
Coal industry profits dropped to 152.69 billion yuan ($21.15 billion) in the first quarter, down 33.5% year-on-year, analysts from the CCTD told a market seminar on Wednesday.
For the first four months of the year, production stood at 1.48 billion tons, down 3.5% compared with the same period last year.
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