China April coal output eases from record high in March

19th May 2023 By: Reuters

SINGAPORE - China's average daily coal production dipped in April from a record level a month ago, official data showed on Tuesday, as some miners trimmed output because of harsh weather and as demand fell.

China produced 381.45-million tonnes of coal last month, up 4.5% from a year earlier and down 8.6% from March, data from the National Bureau of Statistics (NBS) showed.

The daily average output in April was equivalent to 12.72-million tonnes versus a record 13.46 million tonnes in March, according to Reuters calculations based on NBS data.

Over the first four months of 2023, China produced 1.53-billion tonnes of coal, 4.8% higher than the same period in 2022.

Production fell from March as unseasonable snow hit Inner Mongolia in early April, forcing some open-pit mines to shut down and slowing road transportation.

Additionally, a 30-day maintenance project at the major coal transporting railway from Datong to the port of Qinhuangdao limited logistics and capped output growth at coal mines.

Coal output also rose year-on-year even as major mining regions such as Inner Mongolia, Shanxi and Shaanxi tightened safety inspections after a deadly accident in late February.

Some 32 coal mines with combined capacity of 50.1 million tonnes were shut down because of safety concerns.

The closures were offset by the launch of new coal capacity, following Beijing's approval of hundreds of expansions over the past two years.

Analysts estimate 300 million tonnes of coal mining capacity were added in China in 2022 and at least 89 million tonnes more will be added in 2023.

The country's state planner, the National Development and Reform Commission, in April urged coal miners again to ramp up output and to fulfil their term contracts to supply to power plants.

Coal output in May is expected to stay steady or fall further as some mines plan maintenance during the low-demand season, traders and analysts said. April and May are typically the low season for coal and power consumption as temperatures rise but are not high enough to boost air conditioning demand.

Power generation in April was 658.4-billion kilowatt-hours (kWh), up 6.1% year-on-year but down 8.2% from March, the NBS data showed. April's daily power output was the lowest since October.

The average utilisation rate at major coal mines was 85.1% in early May, data tracked by the China Coal Transportation and Distribution Association (CCTD) showed. That compares with about 85.7% in mid-April and 82% in the same period last year.

CCTD data also showed inventories at coal mines were 68 million tonnes by the end of April, up 7.5% from a month ago.

In April, China produced 41.29 million tonnes of coke, up 2.3% from a year earlier, the NBS said.