Coal production in China saw a significant increase of 4.4% in September compared to the previous month, reaching a total of 414.46 million tons, according to government data. This rise can be attributed to the completion of safety inspections in coal-producing regions and the resumption of coal-to-chemicals operations after maintenance. Analysts from Galaxy Futures, a financial services firm in China, noted that the capacity utilization rate has been gradually increasing following the maintenance activities.
Despite the monthly increase, coal production for the first nine months of the year only saw a marginal growth of 0.6%, totaling 3.48 billion tons. This slower growth rate can be linked to safety measures that resulted in a reduction in accidents and fatalities in coal mines. The demand for coal primarily came from the power generation sector, where coal remains a dominant source, as well as from heavy industries.
In addition to the rise in domestic coal production, China’s coal imports also surged in September, reaching 47.59 million metric tons, a 13% increase from the same period last year. This increase in imports was largely driven by favorable pricing differentials between foreign and domestic sources. Meanwhile, coal prices at the Asian benchmark in Newcastle, Australia, experienced fluctuations throughout the month, with a low of $136.46 per metric ton on September 23, representing a 7% decline from the August peak.
Coal continues to play a significant role in China’s energy mix, accounting for approximately 60% of the country’s electricity generation. Despite efforts to increase the share of renewables like hydropower, coal remains a dominant source due to its reliability and affordability. In contrast, natural gas only contributes less than 10% to China’s electricity generation.
Looking ahead, the outlook for China’s coal sector remains influenced by a variety of factors, including domestic production levels, import dynamics, and global pricing trends. As the country continues to balance its energy needs with environmental considerations, the role of coal in the energy transition will be a key area to monitor in the coming months.
