According to data from China’s National Bureau of Statistics (NBS), the country’s coal output rose to a six-month high in June as mines ramped up production to meet seasonal demand and safety inspections that constrained production earlier in the year eased.
China, the world’s largest coal producer, mined 405.38 million metric tons of the fuel last month, a 3.6% increase from a year earlier and the highest since December. The six-month high was calculated by averaging out January-February production, since NBS reports the two months in a combined data release to smooth out the effects of the lunar new year holiday.
Analysts at Galaxy Futures attributed the higher output in June to seasonal effects from the Northern Hemisphere summer increasing demand for air conditioning as temperatures rise. They also cited an improvement in the rate of deadly mining accidents allowing some mines to restart operations.
Lower production from China’s coking coal hub of Shanxi had weighed on output during the March-May period after the local government ordered a series of safety checks following an uptick in deadly accidents, and told miners to curb excess production. The province mined 29% of China’s coal last year.
Average daily output in June rose to 13.5 million tons, the highest since December, according to Reuters’ calculations using the NBS data.
Output will continue rising in the third quarter because of seasonal demand, the Galaxy Futures analysts forecast. However, July growth could be constrained by China’s third plenum, a key political meeting taking place July 15-18, during which authorities are expected to maintain some restrictions on output to avoid accidents.
The lower output during January-May continued to weigh on the year-on-year comparison for the first half of 2024. Output in the January-June period was 2.27 billion tons, down 1.7% compared with the same period last year.