China April coal output down 11 percent on year: stats bureau

BEIJING (Reuters) - China produced 268 million tonnes of coal in April, down 11 percent on the year, the National Bureau of Statistics said on Saturday, with producers cutting back in a concerted effort to shore up prices.

A labourer carries honeycomb briquettes at a coal processing factory in Shenyang, Liaoning province in this December 2, 2009 file photo. REUTERS/Sheng Li/Files

China’s coal sector has been struggling with a massive capacity glut and miners have been encouraged to cut production to shore up domestic prices, which plummeted around 30 percent last year. The country has promised to shed 500 million tonnes of surplus capacity in the next five years.

Coal output over the first four months reached 1.081 billion tonnes, down 6.8 percent from the same period last year, with full-year production on course to see its third consecutive annual decline.

Though coal consumption normally rises in the second quarter, with supplies traditionally under intense pressure as power plants boost their reserves ahead of the summer peak, analysts do not foresee any jump in prices, particularly as high hydropower volumes reduce the need for coal-fired generation.

“Entering May, the weather has been fine, residential power use has stayed weak and power plants are undergoing routine maintenance, and also we have the heavy rainfall in the south that has boosted hydropower,” said Chen Jie, an analyst with the China Coal Trade and Distribution Centre, in a research note.

Thermal power generation hit 328 billion kilowatt-hours (kWh) in April, down 5.9 percent on the year, though a 10 percent jump in hydropower generation during the month meant overall volumes fell by just 1.7 percent to 444.4 billion kWh.

Crude steel production hit 69.42 million tonnes, down from a record-high in March but 0.5 percent higher than the same period of last year, with mills still keeping output high in order to profit from higher prices.

The production of coking coal used in steelmaking fell 3.4 percent in April to 36.25 million tonnes, with year-to-date output reaching 138.87 million tonnes, down 7.6 percent.

Cement production reached 216.26 million tonnes in April, up 2.8 percent on the year, extending a period of restocking that began in March as new construction activities get underway.

According to data from China’s customs authority, imports of coal reached 18.8 million tonnes in April, down 4.5 percent compared to March, but up 10.4 percent on the year. Imports over the first four months fell 2.5 percent.

Reporting by David Stanway; Editing by Stephen Coates