China's coal production in July fell 4.5 percent to 294 million tonnes from a month earlier, its lowest since October, showing Beijing's crackdown on illegal mining and pollution is curbing supplies even as hot weather boosted use of coal-fired power.
Output was still up 8.5 percent from a year earlier, data released by the National Statistics Bureau on Monday showed. For the January-July period, production was up 5.4 percent compared with the same period a year earlier at 2.0 billion tonnes.
The drop from June came even as authorities called for coal miners to boost output to ensure power supplies as people crank up air conditioners amid a prolonged heatwave across the country.
The data on Monday also showed that total power generation hit its highest on records going back to 2014, fueled by output of coal-fired electricity as the heatwave continued across the north of the country. Coal is China's favourite fuel even as Beijing tries to cut its use and boost renewable energy.
The government has also continued to shut down mines operating without permits in the major producing province of Shanxi and ramping up safety checks.
"We were facing safety and environmental checks, so supply was quite tight and new capacity coming on line was quite limited," said a senior executive at a major miner, speaking on condition of anonymity.
In the month ahead of the 70th anniversary celebrations of the founding of Inner Mongolia, the nation's top coal-producing region, authorities also curbed use of explosives at mines there used to reach deposits and loosen up earth. That may have hurt output, traders said.
Heavy rainfall earlier in the summer slashed hydropower capacity in the south, helping boost demand for coal-fired electricity.
Thermal coal prices have jumped 50 percent since the start of the year, hitting a fresh record of 613 yuan a tonne on Friday. They were down almost 3 percent on Monday morning at 586 yuan ($88.04) per tonne.
The country has so far fulfilled 65 percent of its target for cutbacks on outdated coal capacity.
The National Statistics Bureau also showed coke output in July rose 0.1 percent to 37.3 million tonnes from a year ago. Year-to-date, output was up 2.2 percent at 258.4 million tonnes.
The most-traded coke futures on the Dalian Commodity Exchange have surged 60 percent this year. Last week, they hit 5-1/2 year highs. They were down 1.4 percent at 2,146 yuan ($322.40) per tonne on Monday morning.
($1 = 6.6563 Chinese yuan renminbi)
