Many coal mine accidents have occurred in China recent weeks, but unlike in 2021 this has not led to major changes in coal production. At least six separate accidents, five of which resulted in deaths, have occurred since the end of June (in total, these six accidents have resulted in the deaths of at least 17 miners.) As we have stressed in previous work, during previous years coal mine accidents received much more attention in China and were very often followed by regional and national inspections and restrictions. After China began to experience a coal shortage leading up to last winter, however, a shift occurred in which increasing coal production became much more of a priority than new safety inspections and restrictions. So far this year, production has continued to be prioritized, despite the most recent accidents.

China’s central government is continuing to focus on avoiding any chance of experiencing extreme thermal coal shortages again. Last year, the government in our opinion was very much in denial leading up to the winter, but lessons were learned and a reversal in policy remains in place. For now, China’s coal import prospects are still not bullish as domestic coal production continues to fare a great deal better than thermal coal consumed for electricity generation. The most recently released data shows China’s thermal coal-derived electricity generation has contracted on a year-on-year basis for four straight months, while domestic coal production has continued to grow on a year-on-year basis. During this four-month period, China’s thermal coal-derived electricity generation has contracted on a year-on-year basis by 8% while coal production has grown year-on-year by 15%.