China’s coal output up 2.8% in July despite surging hydropower generation

BEIJING: 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, statistics bureau data showed, even though thermal power output fell while hydropower generation surged.

The world’s largest coal producer mined 390.37 million metric tons of the fuel last month, according to the National Bureau of Statistics data on Thursday, down from June’s 405.38 million tons, which was the highest level since December 2023.

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.

Average daily coal output in July stood at 12.59 million tons, according to Reuters calculations, down from 13.5 million tons a day in June but up from 12.18 million daily tons a year earlier.

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. Meanwhile, 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.

China’s July coal imports rise

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.

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. Output for January-July fell 0.8% from the year earlier to 2.66 billion tons, the statistics bureau data showed.