China September coal output hits nine-month high as new capacity starts up

23-Oct-2018

China’s coal output hit its highest in nine months in September, government data showed on Friday, boosted as new mining capacity started up in the country’s northwest.

China has been given the go-ahead for a number of big coal mines as it tries to ease concerns about fuel shortages amid a crackdown on small outdated mines and tightened emission controls.

Miners churned out 306.01 million tonnes of coal last month, up 3.2 percent from 296.6 million tonnes in August and up 5.2 percent from the same time last year, according to the data from the National Bureau of Statistics (NBS).

Output over the first nine months of 2018 in the world’s top producer of the commodity reached 2.59 billion tonnes, up 5.1 percent from a year earlier.

“The increase in coal output is not surprising as new mining capacity in the northwest was released on schedule,” said Cheng Gong, senior coal analyst at Zheshang Securities.

Coal output from the region of Inner Mongolia last month jumped 11.3 percent from the same month in 2017, while Shaanxi province saw growth of 9.9 percent, according to NBS.

By the end of June, China had a total of 3.49 billion tonnes of coal mining capacity, while another 976 million tonnes of capacity is still under construction, according to data from the National Energy Administration.

“We expect to see more capacity being released in the coming months, which will further boost coal output in China,” said Cheng.

Meanwhile, northern China will soon turn on coal- or gas-powered heating as temperatures drop sharply in the run-up to winter. The official heating season starts on Nov. 15.

Benchmark thermal coal prices on the Zhengzhou Commodity Exchange CZCcv1 have risen around 6 percent from early September.

Source: REUTERS