Wedoany.com Report-Jan 9,Cheap coal will continue to provide the ballast for China’s energy security in the coming year, according to the country’s top industry grouping.
Output is likely to rise 1.5% in 2025 for a ninth consecutive annual increase, while demand should expand 1%, the China Coal Transportation and Distribution Association said at a briefing on Wednesday. Persistently high stockpiles should keep the fuel relatively inexpensive, although overseas purchases may moderate from this year’s record level.
China has expanded mining capacity so that supply runs ahead of demand, and a repeat of the crippling shortages that struck the economy earlier this decade can be avoided. That’s taken its toll on the industry in terms of accidents, which has affected production in some areas.
The top producing province of Shanxi should see output bounce back in 2025 after safety inspections hampered operations last year, said CCTD analyst Feng Huaming. Other coal hubs, including Helongjiang, Xinjiang, Guizhou and Ningxia, are also likely to raise supply to counter shrinking tax revenues from the crisis-wracked property market, he said.
The extra supply could shave imports, although producers that rely on Chinese demand in countries like Mongolia and Russia are likely to try and maximize their sales, he said.
Key forecasts for 2025 from CCTD:
Output +1.5% y/y to 4.82b tons
Output +0.8% to 4.75b tons in 2024
Imports -1.9% to 525m tons
Imports +13% to 535m tons in 2024
China to release official output and import data for 2024 next week
Demand +1%, backed by stronger consumption from power and chemicals sectors, while construction and metals production continues to drag
Domestic benchmark thermal coal price may slump to 630-730 yuan/ton in 2Q on inventory pressures
