China Shenhua Energy Co., the nation’s top coal producer, has set a lower output target for 2024, as Chinese miners ratchet back operations amid a glut of the fuel.
The firm plans to cut annual production by 2.6% from the previous year to 316-million tons, it said in an exchange filing on Monday. Net income in 2023 is expected to fall by as much as 14% due to lower coal prices, according to the company’s preliminary earnings.
Shenhua’s reduced production is largely in line with the controls being put in place across the industry, and will have limited impact on thermal coal prices, Dennis Ip, an analyst at Daiwa Capital Markets Hong Kong Ltd., said in a note.
The firm will, however, expand its fleet of thermal power stations, taking advantage of lower prices, to offset the decline in mining profits, according to a briefing from executives earlier this month.
Shenhua said in Monday’s release it’ll maintain annual spending at at 36.8-billion yuan, a similar level to last year. Capital expenditure over the next five years will range between 30-billion and 50-billion yuan, it said.