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China's daily coal output hits record high in November to meet heating demand

China's daily coal output hits record high in November to meet heating demand

FILE PHOTO: An aerial view shows machinery working in an open-pit coal mine in Ejin Horo Banner, Ordos, Inner Mongolia Autonomous Region, China, October 19, 2021. Picture taken with a drone. China Daily via REUTERS

SINGAPORE :China's daily coal output hit an all time high in November as miners increased operations to meet higher demand for heating despite the logistics problems and resulting stock builds caused by Beijing's heavy-handed zero-COVID curbs.

China churned out about 390 million tonnes of coal last month, data from the National Bureau of Statistics (NBS) showed on Thursday, equivalent to 13.04 million tonnes per day.

That leapfrogged the previous peak of 12.89 million tonnes in September, and was up from 12.36 million tonnes a year before.

Production over the January-November period was 4.09 billion tonnes, 9.7 per cent higher than in the same period a year earlier, the bureau's data showed.

The increased coal output followed repeated calls from the central government to keep energy supplies steady through the winter. Northern China began its four-month heating season from mid-November and most heating facilities are fueled by coal.

The record high production surprised some market players as hundreds of COVID-19 cases have been reported daily in China's major coal mining regions since October, resulting in authorities shutting down coal washing plants and imposing strict mobility curbs for truck drivers serving the mines, which led to them building stocks.

Many coal mines adopted a so-called "closed loop management" approaches, such as barring workers from taking leave, in order to reduce the risk of COVID outbreak and to maintain production.

Daqin railway, China's biggest coal transport line connecting the coal mining hubs with Qinhuangdao port, also resumed last month after an extended overhaul, helping miners to ship out their coal.

Output is expected to stay at high in December following Beijing's sudden loosening of COVID rules, which included scrapping compulsory COVID tests and relaxing quarantine requirements.

That will allow truck drivers to resume cross-region coal transport and ease inventory pressure at coal mines.

Daily coal consumption at coastal provinces reached 2.01 million tonnes last Thursday, up 3.1 per cent from a year ago, according to data compiled by the China Coal Transportation and Distribution Association.

However, coal demand from non-utility end users, such as chemicals and cement producers, is expected to take a longer time to recover, as they could suffer labour shortages as a fresh wave of COVID infections gathers momentum. Industrial plants will also soon shut for the Lunar New Year holiday next month.

Source: Reuters

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