China coal industry group expects output growth to slow in 2024

20th March 2024

By: Reuters


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BEIJING - China's coal output is expected to increase 36-million metric tons, or 0.8%, to about 4.7-billion tonnes in 2024, a Chinese coal industry group said on Wednesday, slower than last year's 2.9% growth.

The projection comes on the back of record output in 2023, when the world's largest coal consumer mined 4.66-billion tons of the polluting fossil fuel.

The China Coal Transportation and Distribution Association (CCTD) expects domestic coal prices to decline at an accelerated pace, partly due to weakness in its real estate markets, said Feng Huamin, senior analyst at CCTD's research department.

Feng pointed to government orders to suspend infrastructure projects in some heavily indebted provinces as one of the key reasons for the pressure on prices.

Declines in property investment and sales in China have slowed amid government efforts to arrest a protracted downturn in the sector, but analysts were wary of calling an end to the pain in the fragile housing markets just yet.

Output from non-fossil sources will add to pressure on thermal output this year, with power output expected to grow in line with its 5% economic growth forecast, Feng said.

"A large portion of forecasting institutions believe that hydropower generation will see clear improvement this year," Feng said, adding that higher solar and wind installations could help address about 70% of the expected growth in power demand.

Drought-like conditions in key generating regions resulted in China headlining an alarming decline in hydroelectricity output in Asia last year, as its output plunged at the steepest pace in decades.

Some miners have paused production for longer after the Lunar New Year break, sources familiar with the matter said. Feng said a few mines are already at risk of hitting their storage limits due to high inventory levels.

Separately, the top coal producing hub of Shanxi is expected to cut output by 40-million tons this year, partly due to a slew of accidents in the recent past, Feng said.

Shanxi saw mine accident-related deaths surge over 50% in 2023, pushing the mining safety regulator to issue a notice last month asking mines to curb overproduction to prevent accidents.

However, power use by industries during the first two months of 2024 grew at a surprisingly high 9.7%, Feng said, a trend which could push stockpiles lower if it continues.

Edited by Reuters




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