China has the world’s third largest coal reserves after the United States and Russian Federation. In 2011, coal production in China grew by 8.8% year on year to 1,956.0Mtoe. The country’s output accounted for 49.5% of global production and 72.8% of output in Asia Pacific. Meanwhile, domestic consumption was up 9.7% year on year to 1,839.4Mtoe. There were nearly 7,700 companies in the coal industry recording a total of RMB 4.2tn in total industry asset value. The coal industry reported 10.1% in net profit margin for the first nine months in 2012.

Coal accounted for 65% of the country’s installed electricity capacity in 2011. China has committed to supercritical and ultra-supercritical pulverized coal combustion technologies in coal-fired power plants. The country has also started to adopt circulating fluidized bed combustion technology in coal-based power generation.

The number of fatal accidents at coal mines continued to drop in 2011. China is expected to see slower growth in coal demand in the short-term, which is in line with the country’s economic growth. Railway freight traffic for coal transportation declined 0.26% year on year in the first ten months this year. In 2012, benchmark prices for Chinese coal dropped from RMB 810 per ton in January to RMB 645 per ton in October. Inventory at integrated dispatching power stations was at record levels by end-October.

Key Points:

• Coal-based power plants with ultra-supercritical pulverized coal combustion technology are under construction. Planned electrical output is estimated to reach 110,000MWe by 2015.

• The government aims to reduce the number of coal companies to below 4,000 by 2015.

• Coal inventory at integrated dispatching power stations reached 93.7mn tons by October 2012, equivalent to 29 days of consumption.