China: Coal output in major producing hubs rises in June

Mysteel Global: China's raw coal production grew by 3.6% on year to 405.38 million tonnes (mnt) in June, marking the first positive growth this year, according to data from the National Bureau of Statistics (NBS). This increase, driven by higher production in key mining regions across the country, has alleviated market concerns over a potential supply shortage during the peak summer demand season, Mysteel Global noted.

North China's Shanxi province, the country's top coal mining hub, produced 114.56 mnt of coal in June, up from 105.66 mnt in May. This marked the third consecutive month of growth. Although the province's June output was 6.5% lower than the same period last year, the decline has been steadily narrowing from 6.9% in May, 11.9% in April, and 21.0% in March.

To ensure stable coal supply, Shanxi has eased its safety checks on local mines after production hit a multi-year low of 94.33 mnt in March, Mysteel Global observed. The provincial authorities had launched a campaign in February cracking down on coal mining activities beyond the approved operation rates, to ensure safety at mines, as reported.

Taiyuan, the capital city of Shanxi province, has instructed relevant authorities to accelerate new coal production capacity approvals and streamline review procedures for suspended mines to resume operations if safety conditions can be guaranteed, according to a document issued by the municipal government on 16 July.

This approach could be the epitome of the province's coal production strategy as Shanxi needs to accelerate its production to meet its annual goal of 1.3 billion tonnes (bnt), Mysteel Global noted. In the first half of 2024, the province extracted 587.89 mnt of raw coal, completing 45.3% of the annual guidance, the NBS data showed.

Inner Mongolia, the country's second-largest coal hub located in North China, produced 108.15 mnt of raw coal in June, up 9.7% on year and 7.6% on month, respectively, the NBS data showed. Despite trailing Shanxi's 114.56 mnt last month, Inner Mongolia ranked first in cumulative raw coal output for the first half of this year, with a 3.8% on-year rise to 633.87 mnt.

At large opencast coal mines such as Heidaigou and Ha'erwusu, both owned by the state-owned mining giant China Energy Investment Corporation in Inner Mongolia, the integration of intelligent technologies into coal mining and transportation has boosted mining efficiency in the region.

In Xinjiang, coal production jumped 47.3% on year to 42.96 mnt in June, adding its total output for January-June to 240.18 mnt, a 13.4% rise on year, the NBS data showed.

Xinjiang has become a key driver of China's coal output growth. Increased demand from other places in the country prompted the northwestern region to accelerate coal extraction. In first half of 2024 (H12024), about 42 mnt of coal were shipped outside of Xinjiang by train, a 58.7% rise from the same period last year, according to local rail network operator China Railway Urumqi Group.

The increased coal production in June has eased worries about supply tightness during the ongoing summer peak demand season, Mysteel Global noted.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.