Coal Isn't Dead. China Proves It.

January 23, 2019, 7:05 pm | Admin

For demand, too many confuse the crucial difference between "growing less slowly" or remaining "buoyantly very high" versus "shrinking" or "declining." Similar to U.S. oil demand, China's coal consumption aligns with the first two. While it could indeed be said that Chinese coal demand has been relatively flat for a few years now, importantly, it hasn't been falling in the absolute sense.

For production, China’s December coal output was 2.1% higher than it was in 2017, hitting the highest level in over three years. The country started up new mines last year and then ramped up production to meet high winter demand. Due to domestic gas supply shortages in recent years, China has been softening its stance to displace coal heating with natural gas.

China approved nearly $6.7 billion worth of new coal mining projects in 2018, and production increased 5.2% to 3.55 billion tonnes.

For imports, now a much larger portion of the supply mix, coal imports in China were up 9% last year.

This year, China's plan to kick start its economy with new stimulus measures could also lead to another uptick for coal. Remember that in China coal is about 60% of all energy supply and generates 65% of total electricity, so economic growth can easily translate into more coal usage.

Last modified on January 25, 2019, 7:09 pm | 800