Coal stocks are in a slump after Chinese news agency Xinhua reported that coal producers are planning to reduce the amount of coal they will buy in 2020, due to slowing demand in the world’s second-largest coal producer.
China’s state-owned Xinhua News Agency reported on Thursday that China’s coal industry has been “relentlessly falling”, and that the country will purchase around 9 billion tonnes of coal in 2020 from domestic producers, and 1.5 billion tonnes from foreign ones.
The news agency also said that Chinese coal companies have reduced the amount they will spend on buying coal in order to increase the price of coal.
“China has been losing coal for many years and has been running a coal-intensive economy for several decades, which is why it’s very hard to make any kind of gains in the economy,” a spokesperson for one of China’s biggest coal producers, Huobi Group, told Xinhua.
In recent months, Chinese coal imports have dropped by around 80%, which has led to the country’s coal stocks plummeting.
This comes as Chinese miners have begun to struggle with low production, with the world coal market having already collapsed by over 80% in the last three years.
According to China’s Ministry of Industry and Information Technology (MIIT), coal production in 2020 will be 6.5 million tonnes, down from 9.4 million tonnes in 2020.
Analysts have speculated that China may be seeking to balance its finances with a gradual increase in exports to offset a shrinking domestic market.
Last month, China’s State Council announced that the government will introduce a new national carbon price.
Chinese government has also said it plans to phase out coal-fired power generation by 2030, with a goal to have half of the country off coal by 2030.
It is estimated that China is now burning about 8.5bn tonnes of CO2 annually, with most of the emissions coming from coal-burning power plants.
There are currently around 70 million coal mines in China, with around 4.5m of them producing coal for export.