China Aug coal output rebounds from 2-year low Production & Sales 2021-09-15 11:47:38

China's coal production in August bounced back from a 26-month low in the previous month after a number of coal mines gained approvals of land use under the central government's supply-boosting policy.

China produced 335.24 million tonnes of coal last month, a 0.8% rise from the same period last year, data from the National Bureau of Statistics showed on September 15. The figure also came 0.7% higher than August 2020, taking the two-year average growth to 0.3%.

On a month-on-month basis, August's production rose by 6.71% or 21.07 million tonnes from 314.17 million in July.

The National Development and Reform Commission (NDRC) has approved dozens of coal mines for their land use licenses in the past two months. In Inner Mongolia, at least 16 opencast mines got approvals in August, involving capacity of 25 million tonnes per annum, but it is unknown how much capacity has been put into operation.

The NDRC has repeated its call to ramp up domestic production to ease the long-standing supply shortage, but mines, except for those newly approved, have been generally running to their limits, leading to limited space for a noticeable production increase.

Meanwhile, mining safety watchdog remained in a harsh attitude towards production beyond their approved capacity, an unsafe practice that is prone to mining accident.

China's state media agency Xinhua reported that 19 workers stranded at a coal mine accident in Qinghai last month were found dead, which may have added pressure on authorities to step up safety inspections nationwide. Tighter safety measures have curtailed available coal supplies, supporting the Chinese market.

Chinese thermal coal market has repeatedly bettered their price records in recent days, due to a persistent mismatch between supply and demand. Benchmark 5,500 Kcal/kg NAR thermal coal was primarily offered at 1,320-1,330 yuan/t as of September 14, a level more than doubled the upper limit of the NDRC-preferred volatility range.

In the first eight months, China's coal production totaled 2.6 billion tonnes, up 4.4% from a year earlier, the NBS data showed.

(Writing by Alex Guo  Editing by Tammy Yang)
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