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China coal industry’s Jan-May profits slump 44% on year amid low prices

China’s coal mining and washing industry reported profits falling 43.9% year on year to Yuan 51.26 billion ($8.3 billion) during the first five months of this year, mainly due to sagging coal prices, data from the National Bureau of Statistics showed.

During the same period, major coal mining and washing enterprises — those with annual revenue of above Yuan 20 million — earned total revenue of Yuan 1.22 trillion from core businesses, down 6.6% year on year, while profits were at Yuan 48.81 billion, down 46.4% year on year, the data showed.

Profit for the country’s entire mining industry fell 16.4% year on year over January-May to Yuan 276.75 billion, the data showed.

The ferrous and non-ferrous metal industries saw January-May profits fall 3.8% and 17.2%, respectively, year on year to Yuan 28.3 billion and Yuan 20.9 billion, the data showed.

However, profits of the power and heat generation industry surged 27.3% year on year to Yuan 162.36 billion, attributed largely to falling coal prices.

Impacted by the woes in the mining industry, coal-rich provinces such as Heilongjiang, Shanxi and Inner Mongolia lagged other provinces in terms of industrial growth during the first five months, posting growth rates of 0.8%, 3.9% and 8.9%, respectively, significantly lower than 8.5%, 11% and 11.6% last year, the data showed.

For Q1 2014, GDP growth rates of Heilongjiang and Shanxi provinces slowed to 4.1% and 5.5%, respectively, significantly below the national average of 7.4%.

Fenwei Energy is a leading provider of coal market information in China.
Source: Platts