China's coal production in September rose 4.4% due to safety improvements and chemical industry demand

Data from the Statistics Bureau showed that China's coal production rose by 4.4% in September compared to the same period last year, following safety inspections completed earlier this year and increased coal-tochemicals capacity.

The September output increased to 414.46 millions metric tons from 396.55 millions tons in August.

Analysts at Galaxy Futures reported that "coal production continued to increase in September, mainly due to an improvement in mine security."

According to the mine safety administration of Shanxi, accidents and deaths in coal mines in this major producing province fell by 42 and 40 percent respectively in the first six months of the year due to increased safety inspections. This allowed mines to restart production in order to meet the increased demand.

As a safety measure, the province, which will mine 29% of China’s coal by 2023, instructed miners earlier this year to reduce excess production.

According to revised government figures, the output for the first nine-month period of the year reached 3.48 billion tonnes, an increase of 0.6% over the previous year.

The data from the statistics bureau showed that coal consumption is increasing due to thermal power generation in China, which is mainly fuelled by coal. In September, this figure was up 8.9% compared to a year ago, reaching 545.1 billion Kilowatt-hours.

The industrial sector also saw a rise in demand.

Galaxy Futures analysts stated that the capacity utilization rate had gradually increased after the maintenance was completed on coal-based methanol production, urea production, PVC production and other chemical capacities.

Analysts at Galaxy Futures predict that production will increase through the remainder of the year. This would lead to a total output in 2024 of 4,68 billion tons. This is an increase of around 0.5% over last year's record of 4,66 billion tons.

(source: Reuters)