Coal output expected to have declined

China's coal output in 2014 is expected to have declined by 2.5 percent year-on-year, the first decline since 2000, People's Daily reported Sunday, citing the latest figures from the China National Coal Association (CNCA).

According to CNCA, the main business revenue of major coal factories across the nation was 2.74 trillion yuan ($439.50 billion) in the first 11 months of 2014, a decrease of 6.6 percent year-on-year, and the profits declined by 44.4 percent, resulting in more than 70 percent of the producers making losses, the report said.

China Coal Price Index, a gauge to show the price change, dramatically declined from 161.8 at the beginning of last year to 137.8 at the end of last year, it said.

The coal market had an oversupply situation in 2014, resulting in a decline in prices and business pressure for producers amid weak demand and the large amount of imports, Jiang Zhimin, vice director of CNCA, said in the report.

The big coal users - electricity, iron and steel, and building material sectors - dropped their coal consumption by 3.4 percent, 1.4 percent and 1.1 percent year-on-year in 2014 respectively, the report said.

Coal imports also squeezed the prices for domestic coal.

In 2014, China imported 291.22 million tons of coal, a decline of 10.9 percent from 2013, but the sum accounted for 8 percent of coal consumption across the nation, and coal imports will still remain at a high level, Zhang Hong, vice secretary-general of CNCA, was quoted by the report as saying.

In the past 14 years, the growth of coal output hit its highest level in 2011, with a growth of 285 million tons. The coal market has since then seen decreasing growth since 2012, which witnessed an output growth of 130 million tons. The figure dropped to 30 million tons in 2013, following negative growth in 2014, according to the report.

The National Development and Reform Commission, the country's economic planner, said in January that the coal consumption in four cities and regions, including Beijing and Tianjin municipalities and North China's Hebei and East China's Shandong provinces, are expected to decrease by 83 million tons by 2017, while North China's coal-rich Shanxi Province also vowed to approve no more coal projects by 2020.

The CNCA predicted that the market will still see an oversupply this year, and the companies will still face significant pressure, the report said.