- Continued mining capacity ramp-up to boost coal output
- Consumption to rise 1.5% amid muted industrial demand
Mysteel Global: China’s coal production is expected to climb by approximately 5% in 2025, buoyed by the continued ramp-up of advanced capacity in major mining regions, the China National Coal Association (CNCA) said in its latest forecast on 7 July.
The estimate followed the strong sprint in this year’s first five months. The country’s raw coal production hit 1999 million tonnes (mnt) over January-May, up by 139 mnt from a year earlier and hitting a record high for the five-month stretch.
China produced 4.76 billion tonnes of coal in 2024, marking a 1.3% y-o-y increase and setting a new annual record, according to National Bureau of Statistics (NBS) data. That represented around 50% of global output.
Production is heavily concentrated in China’s northern coal heartlands of Shanxi, Shaanxi, Inner Mongolia and Xinjiang, where large, state-backed mines are allowed to expand at scale, Mysteel Global learnt.
Coal remains the cornerstone of the country’s power supply sector, especially during critical demand periods such as summer, so its role in safeguarding grid stability is crucial when power consumption is breaking records, such as now.
On 4 July, the national power load hit an unprecedented 1.47 billion kilowatts (kW), data from the National Energy Administration showed, a near 150 million kW jump from the same day a year ago. Demand in the eastern grid peaked at 422 million kW, the NEA data show, with air conditioning alone accounting for 37% of that. The day before, on 3 July, China’s National Meteorological Center had issued another yellow alert for heatwave conditions in many regions, with daytime temperatures of 37-39°C forecast.
As of mid-June, coal inventories held at all power plants in the country totalled around 210 mnt, about 3 mnt higher than end-March. The inventories are estimated to support around 35 days of use, the latest CNCA data showed.
Still, despite the production momentum, the CNCA sees only a modest uptick of around 1.5% in coal consumption this year. Power generation is expected to register a moderate gain, but industrial demand remains muted. The steel and cement sectors are forecast to shrink slightly, while chemical usage may post a mild increase, the CNCA said.
In January-May, thermal power generation – mostly by burning coal – reached 2,444.8 billion kWh, accounting for 65% of the total, its lowest share ever recorded, the NBS data showed.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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