#China #CoalIndustry #EnergySector #FossilFuels #RenewableEnergy #EconomicGrowth #RealEstate #EnvironmentalImpact
China’s coal production is set to witness a marginal increase in 2024, following a record output in the previous year, as reported by the China Coal Transportation and Distribution Association (CCTD). The projected growth of 36 million metric tons, or 0.8%, bringing the total to approximately 4.7 billion tonnes, signifies a deceleration compared to the 2.9% growth observed last year. This slowdown in growth comes in the context of China’s position as the world’s predominant coal consumer, having mined 4.66 billion tons of coal in 2023.
Feng Huamin, a senior analyst at CCTD, highlighted an anticipated decline in domestic coal prices, influenced by weaknesses in the country’s real estate sectors and governmental directives to halt infrastructure projects in debt-laden provinces. These factors contribute to the downward pressure on coal prices despite previous efforts to revitalize the struggling housing market, which have yet to signal a definitive recovery.
Furthermore, the transition towards non-fossil energy sources is expected to exert additional pressure on thermal coal output. Feng underscored the alignment of power output growth with China’s economic growth forecast of 5%, propelled by substantial improvements in hydropower generation and enhanced solar and wind installations. These renewable energy sources are poised to satisfy approximately 70% of the projected increase in power demand, marking a significant shift from the previous year’s steep decline in hydroelectricity output due to drought conditions in key regions.
The report also mentions operational adjustments within the coal mining sector, including prolonged production pauses post-Lunar New Year and challenges related to storage capacity due to high inventory levels. Notably, the leading coal-producing region of Shanxi is slated for a production cutback, motivated in part by a series of accidents and a significant rise in mine-related fatalities, prompting regulatory actions to mitigate overproduction and enhance safety measures.
Despite the overarching trends toward energy diversification and environmental considerations, the initial months of 2024 have witnessed a substantial increase in industrial power usage, surging by 9.7%. This unexpected rise could potentially deplete coal stockpiles if the trend persists, underlining the complex interplay between energy production, economic activities, and environmental policies in shaping China’s energy landscape.
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