In the first four months of this year, China's coal industry faced a challenging period, marked by two major declines: both total coal production and fixed asset investment in the sector experienced negative growth. According to reports, national coal output reached 1.15 billion tons during this period, a decrease of 23 million tons compared to the same period last year—equivalent to a 2% drop. Meanwhile, coal-related fixed asset investments fell by 6.6% year-on-year.
Wang Xianzheng, president of the China Coal Industry Association, highlighted that the coal sector has undergone significant changes since the start of last year. Demand for coal has slowed down, leading to reduced profitability for many companies, with some even facing losses. In addition to the "two negatives," the industry is also experiencing "two highs" and "two declines."
The "two highs" refer to high levels of coal stockpiles across society and continued high import volumes. Currently, total social coal inventories stand at 292 million tons, which is about 150 million tons above normal levels, making it difficult to reduce these stocks. At the same time, coal imports have surged—reaching 110 million tons in the first four months, a 25.6% increase from the previous year, further pressuring domestic markets.
The "two declines" include a sharp drop in economic performance for coal enterprises and falling coal prices. In the first quarter, revenue for large-scale coal companies fell by 2.6%, while profits dropped by a staggering 40.3%. Some major coal enterprises are now operating at a loss, and there have been reports of delayed wages in certain companies. Additionally, coal prices have declined significantly, adding to the industry's struggles.
In response to these challenges, Wang emphasized the need to enhance the long-term stability of coal supply nationwide and pay close attention to structural adjustments within the industry. He also called for increased focus on the safety implications of the current economic downturn, urging stronger responsibility and improved management of hazards such as gas and water risks. Strengthening safety measures and improving overall security capabilities will be essential in navigating this difficult phase for the coal sector.
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