China daily coal output hits multi-year peak, prices expected to fall

BEIJING: China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner said in a statement on Monday, as Beijing tries to fill a supply shortage ahead of winter.

On Sunday, China’s State Grid Corp warned of a “tight balance” between power supply and winter demand, even after an energy crunch eased following measures to boost coal supplies and get large users to cut back on electricity.

Average daily coal output for Nov. 1-5 reached 11.66 million tonnes, up by 1.2 million tonnes from end-September, logging 11.93 million tonnes for one of the days during the period, the National Development and Reform Commission (NDRC) said.

Coal inventories have also gained. Stockpiles at power plants exceeded 117 million tonnes as of Saturday, said the NDRC, while portside inventories gained nearly 1.5 million tonnes from over a month ago to 5.39 million tonnes on Nov.7.

“With more coal capacity to be released and production to continue to increase ... coal prices are expected to continue to decline steadily,” the NDRC said.

The most-traded thermal coal futures contract on the Zhengzhou Commodity Exchange fell 3% to 920 yuan ($143.79) per tonne as of 0215 GMT.

China’s coal futures have plunged 52% since a historical high of 1,908 yuan per tonne on Oct. 19.