China’s Coal Production Hits Six-Month High

Authored by Tom Kool via OilPrice.com,

China aims to avoid coal shortages during the peak summer demand season by stockpiling coal and increasing production.

China boosted its coal production in June to the highest level in six months as it looked to meet power demand for cooling in the summer and as eased mining safety inspections allowed some mines to resume operations. 

Chinese coal production stood at 405.38 million metric tons in June, the highest volume since December 2023 and a 3.6% rise compared to June last year, according to data from China’s National Bureau of Statistics (NBS) reported by Reuters on Monday.  

Earlier this year, Chinese coal output was weaker, due to numerous safety inspections at mines following deadly incidents, and lowered production in the province of Shanxi, China’s top coal-producing area, which accounts for nearly 30% of domestic output. 

Coal output in China has wobbled this year after authorities in the northern province of Shanxi ordered in February miners to reduce production and carry out safety inspections between March and May, following several fatal incidents at mines in China in recent months. 

In April, for example, Chinese coal production fell to the lowest level since October 2022, according to Reuters estimates. The decline was the result of weak coal prices and continued safety inspections at mines. 

China continues to rely on coal and coal-fired power generation to meet its growing power demand, and despite being the world’s top investor in solar and wind capacity, it also plans a lot of new coal-fired electricity capacity.

Ahead of the summer, China, the world’s biggest coal consumer, had accumulated inventories of 162 million tons of coal over the first five months of the year, equal to about 8.5% of consumption during those five months, per data from cqcoal.com cited by Bloomberg last month.

China has been stocking up on coal in anticipation of peak demand during the summer.

After several years of coal shortages during peak summer demand season, this year may be the first year that China avoids one.