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China Coal Output Rises in August But Restrained by Safety Steps



September 19, 2023 - China’s August coal output rose 2% from a year earlier, rebounding modestly after tightened safety measures reined in operations at the major mining hubs the month before, although analysts expected the curbs would continue to constrain production.

China, the world’s biggest coal producer, churned out 382.17 million metric tons of the fossil fuel last month, equivalent to 12.33 million tons per day, data from the National Bureau of Statistics (NBS) showed on Friday.

That exceeded the previous month’s 377.54 million tons but was lower than June’s 390.1 million tons. China launched more stringent safety inspections in July after two accidents.

“Some coal mines in the mining hubs that were previously closed are resuming production, but the safety checks have not been relaxed,” analysts at China Coal Transportation and Distribution Association said.

“We expect the impact of the inspections on coal production will be sustained in the near term, and it could be hard to bring China’s coal output back to the level seen in the first half of this year.”

More than a dozen coal mines in China’s top mining province Shaanxi were temporarily shut down after a gas explosion at a coal mine in late August killed 11 people.

In the neighbouring Inner Mongolia region, authorities ordered coal mines to carry out self-inspections, putting a cap on production.

Average operating rates at 442 major coal mines in Shanxi, Shaanxi and Inner Mongolia fell to 80.6% in early September from about 81.2% in the previous month, according to figures compiled by China-based data provider Wind. The rate was hovering around 85% in April and May.

China’s coal demand is expected to soften in the next few weeks as the weather cools and air conditioning use wanes. Power utilities in northern China typically start to build up coal inventories in late October for the winter heating season.

NBS data on Friday also showed that, for the eight months to August, China’s total output was 3.05 billion tons, a 3.4% increase over the year-ago period.

The production of coke used in steelmaking rose 6.0% in August from the prior year to 41.58 million tons, with year-to-date output reaching 325.93 million tons, up 2.3%