Coal news and updates

China's July daily coal output falls to 9-month low

SINGAPORE, Aug 15 (Reuters) - China's average daily coal production fell in July to the lowest since October, as ongoing safety inspections at mines put a lid on production, while high inventory and declining domestic prices also discouraged mining operations.

China produced 377.54 million metric tons of coal last month, equivalent to 12.18 million tons per day, which was down 6.3% from June but was around the same month last year, National Bureau of Statistics (NBS) data showed.

Over the first seven months of 2023, China's coal output totalled 2.67 billion tons, up 3.6% from the same period in 2022.

China has tightened mine safety inspections and suspended production at a few coal mines after two fatal accidents occurred in key coal hub Shanxi in July.

Average operational rates at 442 major coal mines in Shanxi, Shaanxi and Inner Mongolia dipped to 81.2% by end-July from 82.4% before the authorities stepped up checks in mid-July, according to data compiled by data provider Wind.

Analysts expect the safety scrutiny to be in place throughout the rest of 2023, which would cap the coal production in the country.

Meanwhile, coal prices in China have been falling over the past month, weighed down by high import volumes, mounting inventories and sluggish industrial demand.

Spot prices for thermal coal with energy content of 5,500 kilocalories in northern China dropped to about 830 yuan ($114.06) a metric ton last week after climbing as high as 875 yuan a ton three weeks earlier, traders said.

Declining coal prices encourage utilities to take lower supply under term contracts from coal mines and seek cheaper cargoes from the spot market.