China's coal output, investment decline

China's coal output and investment both witnessed declines in the first four months of 2013, statistics from the China National Coal Association (CNCA) showed on Wednesday.

The country's coal output in the Jan.-April period stood at 1.15 billion tonnes, down 2 percent from the same period last year, while fixed asset investment in the coal mining industry declined 6.6 percent, according to the association.

The business revenues of the country's major coal producers in the first quarter declined 2.6 percent from the same period last year, with their profit down 40.3 percent, said Wang Xianzheng, president of the CNCA.

The industry has been affected not only by weak demand in the domestic and international market as the world economy enters recession but also a vast amount of cheap coal imported into China, Wang said.

He added that soft demand has made the country's stockpiles bigger and bigger. As of the end of March, China's coal stockpiles reached 292 million tonnes, 150 million more than the normal inventory, making it difficult for the industry to bring the figure down.

Coal imports have kept growing as their prices are more competitive. In the first four months, China imported a total of 110 million tonnes of coal, up 25.6 percent over the same period last year, according to the CNCA president.

The slow-but-sure development in clean energies such as wind power and solar energy has also put a dent in the coal industry, noted Bu Changsen, Chairman of Shandong Energy Group Co..

However,the overcapacity of the industry at present should not conceal the fact that China still faces a shortage of supply in the long term as the country is expected to continue with a fast GDP growth of around 7 percent in the years to come, added Wang.

To solve this conflict, he suggested, the coal industry should vigorously carry out structural adjustment such as promoting coal gasification, which can change the status of coal from a mere fuel product into a raw material for making other products.

China is the world's largest producer and consumer of coal, with official data showing the country's coal production reached 3.65 billion tonnes in 2012.