By Muyu Xu

BEIJING/SINGAPORE (Reuters) – China’s average daily coal production rebounded in June from a six-month low the prior month, official data showed on Monday, as miners ramped up output to meet increasing demand from power generators amid a heatwave.

China churned out 390.1 million metric tons of coal last month, up 2.5% from a year earlier and 1.2% from May, data from the National Bureau of Statistics (NBS) showed on Monday.

Daily production in June was equivalent to 13 million metric tons, up from May’s 12.43 million metric tons, which was the lowest level since October 2022.

Coal output during the first half of 2023 reached 2.3 billion metric tons, 4.4% higher than the same period last year.

Miners have been urged by the government since June to step up output to fill their supply contracts with utilities as rounds of blistering heatwaves have swept across large swathes of China since late June.

Daily coal consumption in eight coastal provinces in June surpassed the levels seen over the same period of the past four years, data compiled by the China Coal Transportation and Distribution (CCTD) showed.

Record temperatures continue to boost air conditioning demand, driving daily coal use at utilities last week to 2.4 million metric tons, highest by far this year, according to data provider Wind and the CCTD.

China’s peak summer power demand typically starts in late June and lasts for two months.

China’s National Climate Centre forecast that most of the country could see temperatures 1 to 2 degrees Celsius (1.8 to 3.6 Fahrenheit) higher than normal this month and next, while precipitation could be 10% to 20% lower than average.

That suggests stronger power demand but possibly lower output from hydropower stations.

Hampering efforts to lift coal production, however, China’s mining safety watchdog tightened inspections in late June, after deadly accidents were disclosed at an iron ore mine in Shanxi and at a coal mine in Liaoning provinces.

Chinese mines are known to be among the deadliest in the world and the country has carried out several rounds of mining safety checks since late February following an accident in Inner Mongolia that killed dozens of people.

The average operations rate at major coal mines in the hubs of Shanxi, Shaanxi and Inner Mongolia fell to 82% in June from 84% in May, data compiled by the CCTD showed.

But coal output is expected to increase further as some miners in Inner Mongolia could be allowed to restart this month after being shut down since March to improve mining safety.

(Reporting by Muyu Xu in Singapore and Dominique Patton in Beijing; Editing by Kim Coghill, Janane Venkatraman and Tom Hogue)

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