China coal production to fall short of target

30th july 2018

Chinese coal production is likely to fall around 2% short of a government target this year, as continuing safety and environmental checks on mines hinder output, consultancy CRU said on Tuesday.

China’s National Energy Administration (NEA) has set a raw coal production target of 3.7bn tonnes for 2018, although CRU reckons the nation’s output will likely be 3.6bn tonnes – up 4% from 2017 levels.

“In order to meet this (NEA) target, monthly output would need to be around 330m tonnes/month during the remaining months of the year,” it said, noting however output in January-May totalled around 300m tonnes/month.

“Furthermore, there is no signal of a large supply increase due to ongoing safety and environmental restrictions,” the consultancy said in a report.

Production in June totalled 298,000t/day, down by 3.4% on the year, while first-half output was 1% lower than in January-June 2017 at 1.7bn tonnes, Montel reported last week.

The shortfall in domestic output has resulted in higher demand for imported coal, with the country’s imports of coal and lignite surging 9% in the first half to 145.5m tonnes, customs data showed.

This in turn offered support to global seaborne coal prices, with the Asia-Pacific benchmark Newcastle index averaging USD 103.87/t in the first half of 2018, up by nearly 30% on the year.

Source: MONTEL NEWS