China’s coal production increased by 2.8% in July compared to the previous year, as mines boosted output to maintain a steady supply amidst record heat, according to data from the National Bureau of Statistics. This rise occurred despite a decrease in thermal power output and a surge in hydropower generation.
The country, which is the world’s largest coal producer, mined 390.37 million metric tons of coal in July, a decrease from June’s peak of 405.38 million tons, the highest since December 2023.
In response to the ongoing hot weather, China’s national energy regulator stated in late July that it was managing coal inventories at power plants to maintain a minimum of 200 million tons.
The average daily coal output in July was 12.59 million tons, down from 13.5 million tons per day in June, but up from 12.18 million tons daily a year earlier.
Despite the increase in coal production, thermal power generation declined for the third consecutive month in July, due to a significant increase in electricity generated from hydropower, driven by heavy rains.
China’s thermal power generation dropped by 4.9% to 574.9 billion kilowatt-hours (kWh), even as total power generation rose by 2.5% to 883.1 billion kWh. Hydropower generation surged by 36.2% to 166.4 billion kWh in July.
The growth of China’s coal-to-chemicals industry is mitigating some of the decreased demand for coal-fired power. Coal consumption in the chemicals sector grew by 21% in the first half of the year, according to Lauri Myllyvirta, a senior fellow at the Asia Society Policy Institute. Myllyvirta noted that China’s focus on energy security and the relative decline in coal prices compared to oil prices have fueled this industry’s growth.
Analysts predict that China’s coal output will continue to rise through the third quarter due to hotter weather and a recovery from earlier production slumps caused by safety inspections, particularly in Shanxi province, China’s coking coal hub, which contributed 29% of the country’s coal production last year. Output in this region was limited after the local government implemented production curbs and increased safety checks from March to May. As a result, coal production from January to July fell by 0.8% compared to the previous year, totaling 2.66 billion tons, according to the statistics bureau.
