Chinese major coal miners saw first-half profits drop due to sliding coal prices

 

>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<

 

 

China Shenhua, the country’s largest state-owned coal mining company, issued a profit warning, saying that its net profit is estimated to reach 32.3 – 34. billion yuan in the first half of the year, falling by 10.8% – 15.5% from a year earlier. 

The decline was mainly attributable to the fact that the company’s coal business recorded a year-on-year decline in profit due to factors such as lower average coal price and increased unit production cost of self-produced coal, it said.

The company sold a total of 1.6 million tonnes of commercial coal in the first six months, rising by 2% from a year earlier; total electricity generation reached 100.2 billion kWh, rising by 18.2%; and its electricity sales reached 94.26 billion kWh, rising by 18.4%, it said.

Another coal mining gaint Shaanxi Coal Industry Co Ltd said its first-half net profit is expected to reach 11.2 – 11.8 billion yuan, slumping 53% – 56% from a year earlier.

The company produced 84.06 million tonnes of coal in the first half, rising by 10.37% from a year earlier, it said.

China’s coal prices declined continuously in the first half. According to data from Wind Information, the price of Shanxi-produced thermal coal at Qinhuangdao port declined from 1,175 yuan per tonne at the start of the year to 759 yuan per tonne as of mid-June, sliding by about 35% and slumping by nearly 50% for the high point of 1,502 yuan per tonne in November last year. Coal prices have rebounded since mid-June and as of July 14, the hit 841 yuan per tonne.

Meanwhile, China’s coal production and imports increased significantly. According to data from the China National Coal Association, the country’s coal output in the first five months of the year reached 1.91 billion tonnes, rising by 4.8% from a year earlier, while coal imports surged 89.6%.