Coal production in China fell by 3.8% on the year last month, to the lowest level since April 2024 in the first annual decline for this year, Reuters reported today, citing figures from China’s statistics bureau.
Coal production over the first seven months of the year, however, was higher by 3.8% from last year, the data showed, with the total at 2.78 billion tons.
Per Bloomberg, the reason for the dip in July was, on the one hand, government efforts to curb oversupply, which is already sizable, and, on the other hand, bad weather consisting of high temperatures and heavy rains that curbed activity in coal mines across the country. The same two factors affected China’s steel production as well, Bloomberg reported, by 4% in July, extending a decline that started early in the year.
China’s government has launched a campaign against overcapacity in numerous industries, which is leading to cut-throat competition, often referred to by the media as a race to the bottom. In coal, the government campaign has taken the form of mine inspections to make sure they are not producing over government-issued quotas.
The record domestic coal output led to a drop in imports, mirrored by India as well, which resulted in a drop in overall coal imports into Asia in July. Per data from Kpler, Asian coal imports last month fell by 7.8%, even though Japan and South Korea imported more coal than in the previous month.
Over the first seven months of the year, coal shipments to Asia declined by 8.4%, again driven by China and India. Chinese coal purchases for the full year 2025 are set to be between 50 million tons and 100 million tons lower compared to 2024, the local industry association, China Coal Transportation and Distribution Association, said earlier this year.
By Irina Slav for Oilprice.com
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