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China’s coal output falls in first half of 2013

World Coal,

According to information obtained by Reuters, China’s coal output fell 3.7% in the first half of 2013, with a slow economy putting pressure on mining companies, which have already experienced a surge in unpaid bills.

Total coal production for the first six months of 2013 stands at 1.79 billion t, which is 68 million t less than the first half of 2012. A total of 16 Chinese provinces have posted declines, the China Coal Transport and Distribution Association (CCTD) said on Wednesday.

“Most of the state-owned coal mines ramped up output […] but many regional and private mines have either stopped production or trimmed output,” CCTD said on its website

The CCTD added that total output from private mines between January and May fell by 13.9% compared to the same time frame one year previously.

The persistent fall in domestic coal prices has also forced many Chinese miners into the red, as labour costs and transportation issues affect companies’ finances.

The CCTD estimated that as many as 26 large coal companies are now losing money, with combined losses of US$ 759.58 million in the first half of 2013.

Coal companies in six Chinese provinces – Heilongjiang, Jilin, Chonqing, Sichuan, Yunan and Anhui – have sunk into the red, the CCTD said.

China’s thermal coal costs range between US$ 80 – US$ 100/t, while many inland Chinese miners must also contend with high transportation costs, and coal of a lower quality.

Chinese coal has also been effected by cheaper imports from Indonesia, Australia and South Africa. As Chinese coal output fell in the first half of 2013, imports to the country rose by 13.3%.

The CCTD concluded that the outlook for the Chinese coal market did not look promising, “The market is unlikely to rebound in the second half [of 2013]. Although consumption is expected to rise modestly in the second half, rising production, growing imports and hydro-power generation will keep the market oversupplied,” the CCTD said.

Edited from various sources by Samuel Dodson 

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