China’s daily coal production in July jumps 16% on peak summer demand

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Coal truck drivers take a lunchtime break in Pingdingshan, Henan province, China. REUTERS/Aly Song/File Photo

SINGAPORE – China’s daily coal output in July jumped 16% from a year earlier following Beijing’s appeal to miners to ensure sufficient supplies during the peak summer season.

The country produced 372.66 million tonnes of coal last month, or 12.02 million tonnes per day, according to data from the National Bureau of Statistics (NBS) on Monday.

This compares to 10.13 million tonnes per day produced in July 2021 and 12.64 million tonnes in June.

During the January-July period, coal production was 12% higher than the previous year, at 2.56 billion tonnes.

The central government has held several meetings in recent weeks in which it reiterated its determination to avoid power rationing during the summer, when demand for air conditioning spikes. He asked coal miners to increase production and fulfill forward contracts with power utilities.

Average daily coal consumption in major coastal regions was over 2.3 million tonnes in early August, about 6% higher than the same time last year, according to Sxcoal data.

Some regions, including cities in the manufacturing hubs of Zhejiang and Jiangsu, have implemented power cuts at local factories to protect electricity supplies for residential users during peak hours.

Monday’s data also showed China’s power output in July rose 4.5% from a year ago to 805.9 billion kilowatt hours, marking the fastest growth in year-on-year since September 2021.

Electricity demand has been subdued since March as strict COVID-19 restrictions have dampened industrial activity.

However, analysts and market participants expect coal production to be curtailed as security checks are stepped up following a fatal mining accident at Shanxi’s main coal mining hub in early August.

Temperatures in northern China are expected to drop in late August, which is expected to reduce coal demand for power generation.

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