China: About 70% of domestic Coal Capacity resumes Operations

As of February 17, some 70.2% of Chinese mining coal capacity had resumed work, with 1,274 mines or 2.9 billion tonnes/year of capacity in operation, China Central Television reported Tuesday, based on data from the country's National Energy Administration (NEA).

Daily raw coal output was 7.1 million tonnes on February 17, exceeding 7 million tonnes for the first time since February 1, the report noted. According to NEA data, only around 39% of China's coal capacity was in operation on February 1, indicating that the country had lifted coal capacity utilization by a huge 31 percentage points in the meantime, Mysteel Global understood.

As of Monday, the quantity of steaming coal stocked at domestic power plants was sufficient to keep the boilers working for 26 days. Stocks at power plants in Central China's Hubei - the core province in the battle against Novel Coronavirus Pneumonia (NCP) - were equivalent to 47 days' use, a high level in the past few years, according to the report.

"Most state-owned coal mines have restarted operations now, and coal output from privately-owned miners is expected to rise too," said a Shanghai-based analyst. However, coal supplies remain tight for now, he remarked.

The use of heavy-duty trucks for coal transportation is recovering at core coal mining hubs too, observed a market watcher based in Northwest China's Shaanxi province. "The highway road blocks have been gradually removed, and more trucks for coal loading are being spotted at the mines," he noted.

As for coking coal production, the operating rate of the 110 domestic coking coal wash plants Mysteel surveys surged by 11.6 percentage points to reach 58% as of February 18, with the restart of coal mining and miner-affiliated coal wash plants all contributing to the higher operating rate, as reported.

Thanks to the boost in coking coal output, coal deliveries to coking plants have increased as well, a development which has partially eased the problem of low raw materials stocks at some coking plants in Hebei, North China, observed a local market watcher.

Due to the battle against the NCP, most Chinese coal miners had postponed resuming operations after the Chinese New Year break over January 24-February 2, which resulted in the short-term supply tightness of both steaming and metallurgical coal, as reported.

On February 19, the price of 6,000 kcal/kg Shanxi steaming coal, for example, was Yuan 615/tonne ($87.9/t) at Qinhuangdao port in Hebei including the 13% VAT, Yuan 8/t or 1.3% higher from that on January 23, according to Mysteel's data.

Over January 23-February 19, Mysteel's price for domestic low-sulphur coking coal (below 0.6% sulphur) rose by 4.2% or Yuan 60/t to reach Yuan 1,479.4/t including the 13% VAT.

This article has been exchanged under the article exchange agreement between SteelMint and Mysteel Global