BEIJING Jan 29 China's coal production is
estimated to have fallen 2.5 percent in 2014, the first annual
drop in more than a decade, hit by a war on pollution and
government efforts to tackle a supply glut as demand from
industry and the power sector weakens.
The forecast by the China Coal Industry Association comes
after official data showed China produced 3.52 billion tonnes of
coal in the first 11 months of 2014, down 2.1 percent, with
mines under pressure to cut output in the second half of the
year in a bid to prop up plunging prices.
The National Bureau of Statistics has yet to publish coal
production data for December or the whole year. China officially
produced 3.7 billion tonnes in 2013.
Last year, Chinese power output growth was the slowest since
1998 while steel production growth was also the weakest in more
than three decades, aggravating a coal supply glut.
Zheng Nan, an analyst at Shenyin Wanguo Futures in Shanghai,
said falling industrial and residential demand made a 2015
"It will remain at such a low level before 2020 given that
the central government has already set the tone to curb air
pollution," he said.
China's coal data is notoriously unreliable and often fails
to take into account a vast amount of illicit, private
production and consumption from poorly regulated industries.
However, official data suggests that the last year-on-year drop
in output was in 2000.
Production has more than doubled since then, causing chronic
pollution problems in industrial regions as well as a surge of
greenhouse gas emissions.
A decline in 2014 output supports a view that China is
close to "peak coal" use, though the International Energy Agency
said earlier this month that it expected Chinese consumption to
continue rising until beyond 2020.
Some experts also warned it was too soon to say whether this
represented a turning point.
Yuan Jiahai, professor at the North China Electric Power
University, said shrinking exports and cooler summer weather in
2014 also contributed to the decline.
Jiang Zhimin, vice-president of the China National Coal
Association, told state news agency Xinhua that he expected
output to fall a further 2.5 percent in 2015.
Shenyin Wanguo Securities' Zheng said any decline this year
would be limited, with the state keen to preserve jobs.
The government has already tried to push production cuts to
support prices and also imposed import restrictions. But efforts
to support prices in 2015 could be offset by a campaign to slash
consumption in more regions.
(Reporting by David Stanway, Kathy Chen and the Shanghai
Newsroom; Editing by Ed Davies)