China: Shanxi's raw coal output falls 3.6% y-o-y in Oct'24

Mysteel Global: Northern China's Shanxi province produced around 112 million tonnes (mnt) of raw coal in October, lower by 3.6% y-o-y and 5.1% m-o-m, respectively, according to the latest statistics from the National Bureau of Statistics (NBS).

This brought Shanxi's accumulated coal output for January-October to 1.04 billion tonnes (bnt), down by 7.7% from the same period last year. Despite this decline, the sole province's year-to-date coal output has been substantial, and its full-year production of the fossil fuel is expected to surpass India's target of 1.08 bnt for the 2024-25 fiscal.

Shanxi aims to produce about 1.3 bnt of coal in 2024, but the current production rates across the province suggest this target may be difficult to meet. Based on its January-October mining result, the province's annualised coal output is estimated at 1.25 bnt, according to Mysteel Global's calculations.

The Inner Mongolia autonomous region, another coal-mining hub situated in northern China, came neck-and-neck with Shanxi in terms of coal production last month with its output growing 7.5% y-o-y to 111.7 mnt. For January-October, the autonomous region produced 1.06 bnt of coal in total, marking the highest among all provinces and regions with a 4.9% y-o-y rise.

Regarding coal output in the past 10 months, Shanxi has ceded its leading position to Inner Mongolia, as its coal production has been significantly affected by stringent government measures to curb overproduction during the first four months of this year.

It is also worth noting that coal production at Northwest China's Xinjiang Uygur autonomous region jumped 42.2% y-o-y to 47.17 mnt last month. This took the region's total volume to 424.75 mnt in the first 10 months, with a 21% rise from the corresponding period of 2023.

Xinjiang's impressive growth in coal output highlights its rising role in coal supply and energy security for the country, though the region may need more time to catch up with Shanxi and Inner Mongolia.

In recent years, Xinjiang's coal production growth has consistently led among the major production regions in China. Official data shows that Xinjiang's raw coal output was around 256 mnt in 2021 and the volume quickly climbed to 371 mnt in 2023, marking a growth of 45% over three years.

Analysts attributed the increase in Xinjiang's coal production to the commissioning of previously approved production capacities, while the immediate driver was the discounted railway freights that pushed down the overall costs for buyers.

China's coal production was 411.8 mnt in October, 4.6% higher y-o-y, and the January-October total increased by 1.2% y-o-y to 3.89 bnt, the NBS data showed.