China’s coal production increased slightly in October compared to a year earlier but fell from the previous month. Last month, China produced 336.6 million tons of all types of coal, representing a 1.4% year-on-year increase but also 0.9% month-on-month decline. The slight decrease highlights domestic producers’ struggle to increase output despite the central government’s repeated calls to keep stocks elevated during the winter.
Shanxi and Shaanxi, two of China’s largest coal-producing provinces, imposed strict safety inspections following mining accidents in both regions. The rigorous safety inspections are expected to last until the end of January, potentially reducing stocks availability for the winter.
Theoretically, a slight decline in domestic production should not create a shortage in China’s coal market. However, the country has been curbing coal imports since April. China imported 13.73 million tons of all types of coal in October, plunging by 46.6% from a year earlier. Coal imports also dropped 8.3% year-on-year to around 250 million tons in the first ten months of 2020.
At the same time, domestic electricity consumption increased, which exacerbated coal shortages. China’s electricity generation stood at 609.4 TWh in October, rising by 4.6% from a year earlier. Electricity use in China has been rising steadily as the economy climbs back from the coronavirus slump.
