China’s coal production in Oct’21 was up 4% y-o-y to 360 million tonnes (mn t). The volume was m-o-m up almost 8% compared to 334.1 mn t in September and also rose 5.5% over the same period in 2019.
The average daily output of coal was at 11.52 mn t, a record high for recent years, as per China’s National Development and Reform Commission (NDRC).
October coal import volumes were at 26.94 mn t, a y-o-y increase of a whopping 96.2%, on the back of the energy crisis.
From Jan-Oct’21, coal output touched 3.30 billion tonnes, an increase of 4% y-o-y. Imported coal volumes during the first 10 months were at 257.34 mn t, marginally up 1.9% y-o-y.
Factors that boosted coal output
This increased output happened on the back of the implementation of the policy measures to ensure more production and supply. As per the NDRC, to unleash more production capacity, the National Mine Safety Administration has streamlined the approval process for coal producers to put qualified mines into operation. So far, the administration has added around 153 coal mines to its emergency supply list, a move expected to increase production capacity by 220 mn t per year.
Higher grade coal output has accelerated, as a result.
The coal stockpiles at power plans have also rebounded, latest official data shows, with power producers nationwide reporting a total of 117 mn t of coal inventories as of 13 Nov’21, an increase of about 40 mn t compared to the levels in end-September.
Coal prices cooling off?
Coal prices have started cooling off on the heels of the higher domestic output. On 29 Oct’21, the trading prices of 5,500 kcal/kg, 5,000 kcal/kg, and 4,500 kcal/kg thermal coal at Qinhuangdao Port were at RMB 1,202/t ($188/t), RMB 1,096/t ($172/t), and RMB 961/t ($151/t), respectively, up RMB 123/t ($19/t), RMB 116/t ($18/t), and RMB 104/t ($16/t) from 24 Sept’21 levels, as per a report from Lange Steel available to SteelMint.
In comparison, China’s coastal coal purchase price of the 5,500 kcal/kg hovered at RMB 1,095/t ($172/t) over 4-11 Nov’21, a significant drop from October levels.
Met coke
According to data from the National Bureau of Statistics, in Oct’21, China’s met coke output was at 35.99 mn t, a y-o-y decrease of 11.3%. From Jan-Oct’21, output was 394.1 mn t, y-o-y increasing a negligible 0.1%.
Power generation
Power generation has been growing. In October, it touched 639.3 billion kilowatt-hours, a y-o-y increase of 3%, but the growth rate was 1.9 percentage points lower than in the previous month. It was an increase of 7.7% compared to the same month in CY’19. The average daily power generation was 20.6 billion kWh.
From Jan-Oct’21, 6.7176 billion kilowatt-hours of electricity were generated, up 10% y-o-y and 1.5% over the same period in 2019.
In terms of energy categories, in October, the growth rate of wind and nuclear power accelerated, while thermal and solar power slowed down, and the decline in hydro power increased. Wind power increased 23.5% y-o-y, an increase of 3.8 percentage points from the previous month. Nuclear power was up 16.9% y-o-y, an increase of 12.6 percentage points from the previous month. Last month, it expanded by 11.6 percentage points, representing a two-year average increase of 5.1%. Thermal power generation was up 5.2%, a 0.5 percentage point slower than the previous month, and an average two-year growth of 1.8%; solar power increased by 0.4%, a decrease of 4.1 percentage points from the previous month.
Outlook
China’s energy crunch is expected to ease as the country’s multiple measures to boost supply and rein in price hikes have started to take effect, securing sufficient energy for factories and households for the approaching winter.
Increased coal output and inventories at power plants will help drive down the soaring coal prices, the NDRC said, noting that prices are expected to continue their decline as production and inventories rise further.
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