China’s monthly coal output shows highest increase since March 2015

China’s October 2021 coal output rose to the highest since at least March 2015, after Beijing approved a raft of coal mine expansions to tame record prices and boost supply.

The world’s biggest producer and consumer of the dirty fossil fuel churned out 357.09 million tonnes of coal last month, up from 334.1 million tonnes in September, data from the National Bureau of Statistics showed on Monday.

Output over the first 10 months of 2021 was 3.3 billion tonnes, up 4% year-on-year.

Since July, China has approved expansions at more than 153 coal mines, which could add 55 million tonnes of coal output in the fourth quarter, the National Development and Reform Commission (NDRC) said last month.

The central government, striving to put an end to power shortages, has also forbidden local governments to shut coal mines without authorisation and urged a restart at closed mines as soon as they have rectified any problems.

The increase comes as India, backed by China and other coal-dependent developing nations, brokered a last-minute amendment at the COP26 climate talks in Glasgow at the weekend to change the final wording of the agreement to “phase down” rather than “phase out” the use of coal.

President Xi Jinping said earlier this year that China will start cutting its use of coal from 2026. Thermal coal currently provides about 60% of the country’s electricity needs,

China’s top planning body said last Thursday that daily coal production had reached a record high of 12.05 million tonnes, after a cold snap a week earlier knocked daily output down by more than 1 million tonnes.

Spot thermal coal prices have fallen to about half their levels of a month ago at about 1,000 yuan ($156.70) a tonne at northern ports, thanks to the raft of intervention measures rolled out by Beijing. The most-traded Zhengzhou thermal coal futures contract plunged 6.1% in early Monday morning trade to 819.4 yuan a tonne. However, traders and analysts are still wary of domestic coal supply in the upcoming winter when bleak weather typically curbs operations at open-pit mines and impedes logistics.

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