Chinese coal production has increased 3% on the year in CY18, to post its highest output since CY15.
As per the data released by the National Bureau of Statistics, Chinese coal production totaled 3.546 BnT (Billion Tonne) in CY18 compared with 3.445 BnT in CY17.
The remarkable growth in output came despite the fact that the country had closed old and more polluting coal mines to reduce pollution. However, the new capacity addition resulted in a net increase in output during the year.
In fact, coal output in Dec’18 climbed nearly 2% Y-o-Y to 320.38 MnT, hitting the highest level since Jun’15, as major miners ramped-up production to cater the upcoming robust demand for winter.
The rise in domestic coal production combined with a stricter restriction had lowered the import demand from China which was the major reason for the steep fall in Indonesian coal prices in CY18.
With supply side reforms in China’s coal sector largely concluded, and new additions to capacity on the horizon, domestic supply was well placed to further suppress the Chinese import demand for coal.
However, after a crackdown on coal mines following the major accident reported on 13 Jan’19 in the northwestern province of Shaanxi, Chinese miners and traders are expecting coal production to fall sharply in Jan’19.
Consequently, the country’s output as a whole for CY19 is likely to be affected, should the government tighten its regulation on domestic coal mining from its current relaxed situation.
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