China : Shenhua Energy anticipates decline in coal production in 2024

China Shenhua Energy Co., Ltd., the largest listed coal producer in China, revised its coal production guidance for 2024, aiming for commercial coal output of 316.1 million tonnes (mnt) and sales of 435.3 mnt, down by 2.6% and 3.3%, respectively, from last year.

This adjustment reflects the company's response to market oversupply and fluctuating demand. Shenhua anticipates a potential 14.3% decline in net income for 2023 due to lower coal prices.

Despite efforts to enhance supply, China Shenhua faces challenges amidst easing coal supply tightness. From 2016 to 2020, production ranged from 290 to 297 mnt annually, rising to over 300 mnt since 2021.

In 2023, China's coal production reached 4.71 bnt, surpassing consumption, leading to a surplus. Looking ahead, Shenhua expects stable coal production amidst economic recovery, indicating a relatively loose supply and demand balance.

However, reducing production by 8.4 mnt in 2024 presents challenges, considering the unmet target of 4 mnt reduction in 2023. Government policies prioritise stable production, emphasising energy supply security.

Given coal's role as a steady energy source and Shenhua's position in power generation, significant production reductions are unlikely.