Nena News

China coal output in August drops to 10-month low

(Montel) Chinese coal production dropped to a 10-month low of 9.4m tonnes/day in August, amid government inspections to improve safety and efficiency at mines and adverse weather conditions, National Bureau of Statistics data showed on Monday.

The decline in output led to higher demand for foreign supplies, with coal and lignite imports rising 30% against July to a four-month high of 815,000t/day.

This in turn helped to drive up seaborne coal prices, with export disruptions from Australian suppliers – due to strike action at mines – further adding to the bullish sentiment.

The Global Coal Newcastle index – an important benchmark for Pacific Basin coal prices – averaged USD 98.65/t in August, up by 46% from the same month last year.

“Mine safety and environmental checks continue keeping tight domestic supply ahead of the National Congress in October,” said Diana Bacila, senior analyst at Oslo-based Nena.

“Daqin rail maintenance will also start in October, thus import demand will likely remain strong in order to replenish stocks,” she said, regarding the line linking China’s top coal producing region of Shanxi, with the country’s largest coal port, Qinhuangdao.

Yet China’s August production total was still 4.6% higher than in the same month last year and the country produced 2.3bn tonnes of coal in the first eight months of 2017, up 5.6% year on year.

The 19th National Congress of the Communist party of China will take place on 18 October. It is held twice in a decade.

Reporting by:
Laurence Walker
14:10, Monday, 18 September 2017