China coal output in Dec slips on COVID; rises to record in 2022

© Reuters. Dunes of low-grade coal are seen near a coal mine in Ruzhou, Henan province, China November 4, 2021. REUTERS/Aly Song/Files

SINGAPORE (Reuters) - China's daily coal output in December fell from November's record as the country's rapidly expanding COVID-19 outbreak has sickened miners and slowed demand from industrial users.

China produced 402.69 million tonnes of coal last month, data from the National Bureau of Statistics (NBS) showed on Tuesday, equivalent to 12.99 million tonnes per day.

That compares with 13.04 million tonnes per day in November, and 12.41 million tonnes in December 2021.

Total production for 2022 rose to a record 4.496 billion tonnes, 9% higher than output in 2021, data from the NBS showed.

Beijing's sudden decision to abandon its strict zero-COVID policy at the end of November has led to dramatic increases in COVID cases. Coal mines in major mining regions such as Shanxi and Inner Mongolia have recorded many workers off sick.

While the lifting of restrictions is expected to raise coal demand from non-utility sectors such steel and cement in the medium term, the surging COVID cases have forced factories to cut back output because of labour shortages.

The slowdown in industrial demand has continued into January and is expected to persist through the Lunar New Year holiday at the end of this week.

China's coal production is expected to expand further in 2023 amid Beijing's emphasis on bolstering energy security. The country is assessed to have approved 260 million tonnes of coal mining capacity in 2022, bringing total capacity to 5.05 billion tonnes.

The National Development and Reform Commission also urged utilities to expand term contracts with domestic miners in 2023, which should prompt miners to further boost their output.

Graphic: China's coal production (bln T) https://www.reuters.com/graphics/CHINA-COAL/OUTPUT/lbvggownlvq/chart.png