GreenergyDaily

Aug. 28, 2025

China has placed curbs on coal production following an unexpected supply increase in the first half of the year that weighed on prices, according to an official of a major mining firm and analysts.

China's output in July dipped to the lowest level in over a year. It had risen more than 5% year-on-year in the first half, sending prices in some parts of the country down nearly 30% year-on-year by the end of June.

Analysts said the country ramped up inspections in July to ensure plants kept to approved production capacity.

"The increase (in supply) has exceeded expectations and that has led to prices falling," an official from China Coal Energy , China's third-largest coal miner, told analysts on Monday.

"So we have seen regulations regarding production and limitations on production imposed."

Shanghai-based commodities consultancy, Mysteel, said on Wednesday that among 153 coking coal mines surveyed in Shanxi, 54 mines with total production capacity of 61.1 million metric tons per year have suspended, or are cutting back, production.

When prices fall below cost level, mines cut back on investments and upgrades, leading to safety concerns, Galaxy Futures analysts said on Thursday.