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China's Dec coal output hits 2-year record over firm demand in winter

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China's December coal output rose from November to hit its highest level since December 2015, as miners boosted output to meet increasing demand after Beijing softened winter coal burning restrictions in northern homes due to gas shortages.

[BEIJING] China's December coal output rose from November to hit its highest level since December 2015, as miners boosted output to meet increasing demand after Beijing softened winter coal burning restrictions in northern homes due to gas shortages.

The world's biggest coal miner produced 314.87 million tonnes in December, up from 299.98 million tonnes in November and up 1.1 per cent from a year ago, data from the National Bureau of Statistics showed on Thursday.

In early December, Beijing scaled back its ambitious plan of converting heating system to clean energy from coal in millions of households and industrial plants across northern China after provinces warned of gas shortages.

For full-year 2017, coal production rose 3.2 per cent from a year ago to 3.45 billion tonnes, boosted by robust demand from industrial plants as the economy performed more strongly than expected.

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"Growing investments in infrastructure and property market have encouraged major coal-consuming sectors such as steel to churn out production, helping to drive coal output," said Cheng Gong, analyst at China National Coal Association.

China's economy grew 6.9 per cent in 2017, beating the government's target and quickening economic growth.

The country generated 6.28 trillion kilowatt-hours(kWh) of power in 2017, up 5.7 per cent from a year earlier.

China last year wound back a production restriction allowing miners to operate for only 276 days, which had led to a spike in coal prices in late 2016.

However, Beijing has also stepped up capacity cutbacks and environmental inspections last year as it looks to shut down the worst polluting mines.

According to the National Development and Reform Commission, China met its 2017 target of eliminating 150 million tonnes of coal capacity by November. The number of coal mines was reduced to around 7,000, from 10,800 in 2015.

The most-active coal futures on the Zhengzhou Commodity Exchange surged over 70 per cent in 2017 and hit a record at 650 yuan (S$133.82) a tonne on Thursday over concerns of tight supplies in peak heating period.

REUTERS

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