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China’s Jan-Feb coal output jumps 10.3% for winter heating

Tuesday, March 15th, 2022

China’s coal output rose 10.3% in the first two months of 2022 from a year earlier, after Beijing encouraged miners to ramp up production for the winter heating season, with demand also receiving a boost from Indonesia’s export ban.

The world’s biggest coal miner and consumer produced 686.6 million tonnes of the dirty fossil fuel during January-February period, up from 617.59 million tonnes in the same period in 2021, the National Bureau of Statistics said.

The bureau combines data for January and February due to the Lunar New Year holiday, which fell in early February this year.

China urged state-owned coal miners to increase output ahead of the festival and ordered them to operate normally during the holidays to ensure market supply and cool prices.

But the daily output in the first two months remained lower than the record high level of 12.4 million tonnes set in December, as private-owned miners shut down for the holiday.

China's daily coal output
Reuters Graphics

Power plants were also ordered to build up and maintain coal inventories equivalent to at least 15 days’ use.

Indonesia, China’s largest overseas coal supplier, imposed a shock ban on shipments on Jan. 1. This boosted demand for China’s domestic coal as seaborne shipments were delayed and regional benchmark prices surged.

China’s output is expected to stay at a level of more than 12 million tonnes a day in the near-term, as Beijing strives to ensure sufficient energy supply amid a global price surge and supply disruption in the wake of Russia’s invasion of Ukraine.

However, surging domestic cases of COVID-19, especially in the top mining region of Inner Mongolia, are challenging coal production and transportation. read more

The major coal shipping railway connecting Datong and Qinhuangdao, with annual transportation volume at 421 million tonnes, is expected to carry out annual maintenance in April.

China’s most-active thermal coal contract for May delivery rose more than 4% in early Tuesday trade before easing to 2.8%.

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