- Mine-site coal stockpiles surge 42% y-o-y in end-Apr’25
- Miners struggle with muted demand, poor profitability
Mysteel Global: China’s coal production is expected to grow at a faster pace than its consumption of the fuel in 2025, the China National Coal Association (CNCA) said in a report by state broadcaster CCTV, hinting that the oversupply situation will linger till at least the end of this year.
The government-backed association forecasts that the country’s 2025 coal production will rise by around 5% compared to last year, buoyed by the commissioning of new production capacity in key coal-producing hubs, including Shanxi, Shaanxi, Inner Mongolia, and Xinjiang. The y-o-y growth underscores Beijing’s unwavering emphasis on energy security, even as downstream industries struggle to absorb the mounting supply.
In contrast, coal consumption is projected to grow by just 1.5-2% this year, driven mainly by steady demand from the power generation sector and a mild uptick in coal use in the chemical industry, according to the report.
Official data cited by the CNCA show raw coal production jumped 6.6% y-o-y to 1.59 billion tonnes (bnt) in the first four months of this year. In full-year 2024, China churned out a record 4.76 bnt of coal.
With no signs of policy easing on supply security, domestic coal miners have been urged to maintain stable output, despite sluggish demand and eroded profitability. This dynamic has sharply depressed prices, industry analysts noted. Mysteel’s benchmark for 5,500 kcal/kg NAR thermal coal came in at RMB 620/tonne (t) ($86.3/t) as of 26 May, tumbling nearly 30% from RMB 880/t at the same time last year.
Mine-site coal stockpiles ballooned to 89 million tonnes (mnt) by end-April, marking a staggering 41.7% surge y-o-y, CNCA said, though it did not specify the number of mines included in the count. At Bohai Bay ports – a bellwether for coal flows from northern to southern and eastern China, inventories also swelled 25% from a year earlier to 31.04 mnt.
In the downstream segment, power utilities appear well-stocked heading into the summer peak. As of mid-May, coal inventories at power plants monitored by CNCA were estimated at 200 mnt, enough to support 36 days of consumption. With ample stocks, their appetite for coal restocking may remain subdued during the summer months, Mysteel Global observed.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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