China's coal output rose 2.8% in July from a year earlier as mines ramped up production to ensure steady supply amid record-breaking heat, China's statistics bureau data showed, even though thermal power output fell while hydropower generation surged.
As Reuters reports, the world's biggest polluter and largest coal producer mined 390.37 million metric tons of the fuel last month, according to the National Bureau of Statistics data on Thursday, which while down from June's 405.38 million tons, which was the highest level since December 2023, was the highest ever for the month of July, surpassing the previous record set in 2023 at 378 million tons.
Average daily coal output in July stood at 12.59 million tons, down from 13.5 million tons a day in June but up from 12.18 million daily tons a year earlier.
China's national energy regulator said late in July it was coordinating power plant coal inventories to keep them at a minimum of 200 million tons because of continuing hot weather.
Thermal power output disappointed the coal industry in July, however, falling for a third straight month as more electricity was generated by hydropower because of heavy rains in July. China's thermal power generation fell 4.9% to 574.9 billion kilowatt-hours (kWh) even as total power generation rose 2.5% to 883.1 billion kWh, the statistics showed.
Production was lower particularly in China's coking coal hub of Shanxi province, which produced 29% of China's coal last year. Output was limited there after the local government told miners to curb excess production and announced stepped-up safety checks over the March-May period.
But other provinces were more than happy to pick up the slack. Most of the extra output came from the country’s second-largest producing region Inner Mongolia, a record 104 million tonnes up from 97 million a year ago...
Hydropower generation for the month rose 36.2% on the year to 166.4 billion kWh.
China's growing coal-to-chemicals industry is offsetting some of the slowing demand for coal-fired power, with coal consumption in the chemicals industry growing 21% in the first half of the year, wrote Lauri Myllyvirta, senior fellow at the Asia Society Policy Institute.
"China's energy security drive and falling coal prices relative to oil prices have driven a boom in this industry," Myllyvirta said.
Analysts have said they expect China's coal output to keep increasing through the third quarter on the hotter weather and as production recovers from a slump earlier in the year due to safety inspections.
By Zerohedge.com