BEIJING, Sept 9 China has reduced its coal
production capacity by 150 million tonnes in the first eight
months of the year, representing 60 percent of its 2016 target
for capacity cuts, state media said on Friday citing the state
The rate is nearly 1.5 times progress in the first seven
months of 38 percent, Lu Junling, a senior official with the
National Development and Reform Commission (NDRC), was quoted as
saying at an industry meeting on Thursday to discuss market
The country is the world's top coal consumer but demand has
been on the wane as economic growth slows and as the country
shifts away from fossil fuels as part of a drive to curb
China's coal producers have lobbied the government to
approve a plan to increase output that could add 8-9 million
tonnes per month of new supply from some 74 mines that produce
high-quality clean coal.
That was discussed at the meeting on Thursday and included a
proposal that would allow producers to raise output if domestic
prices hit certain levels, state-media Xinhua said.
According to the proposal, selected mines would be able to
increase average daily production by 200,000 tonnes if the
benchmark price, the Bohai-rim steam-coal price index (BSPI),
trades above 460 yuan per tonne for two weeks.
That would rise to 300,000 tonnes of coal a day if prices go
up to 480 yuan per tonne, and would increase to 500,000 tonnes
if prices hit 500 yuan for two weeks, Xinhua said.
The BSPI is currently at 515 yuan, according to industry
Any increases would be pulled if prices fall below trigger
levels respectively at 460 yuan, 470 yuan and 490 yuan also for
as long as two weeks.
Zhengzhou Commodity Exchange thermal coal futures, due in
January 2017, were trading at 502 yuan on Friday
morning, down 1.6 percent from the previous session.
(Reporting by Kathy Chen and Josephine Mason; Editing by Joseph