Top Coal Province in China to Curb Output for First Time in Years

Weaker coal prices and demand and mine closures due to safety checks are set to reduce coal output in China’s largest coal-producing province, Shanxi, by 4% this year, for the first time in seven years, according to a plan announced by the provincial government.

Shanxi, which last year produced 29% of China’s coal, is set to see its coal production drop to 1.3 billion metric tons in 2024, from 1.36 billion tons produced in 2023, Reuters reported on Monday, quoting a post on the local government’s WeChat account.

In February, authorities in the northern province ordered miners in Shanxi to reduce production and carry out safety inspections between March and May, following several fatal incidents at mines in China in recent months.

In January and February 2024, total Chinese coal production declined by 4% compared to the same period of 2023, amid the safety checks in Shanxi.

China’s coal output fell to 705.27 million metric tons in January and February, down from 734.23 million for the same period last year, per data from the National Bureau of Statistics, which publishes combined output figures for both months due to the Lunar New Year holiday.

Moreover, coal prices in China have been weaker for months, partly due to lower demand for coal for cement and steel production amid the property crisis in the world’s second-largest economy.

Chinese coal imports this year are expected at around the record levels of 2023, according to an executive at China’s state-run utility Guangdong Energy Group. 

China’s coal imports jumped last year by 62% to a record high of 474.42 million metric tons, driven by high demand, lower-quality domestic coal, and higher domestic prices.

This year, imports are expected to be between 450 million and 500 million metric tons this year, Reuters quoted Wu Wenbin, head of coal management at Guangdong Energy Group, as saying last month.

By Charles Kennedy for Oilprice.com

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