What’s new: Chinese coal companies made nearly twice as much profit in the first quarter compared with the equivalent period last year, new statistics show, as high prices widened the margins of miners amid the country’s recovery from the Covid-19 pandemic.
A group of over 4,000 of the country’s large-scale coal firms booked combined net profits of 80.88 billion yuan ($12.58 billion) in the three months through March, according to a report (link in Chinese) published Saturday by industry group Coal China. That’s a rise of 94.3% on the same period last year, when China’s Covid-19 outbreak caused a prolonged slump in production and demand.
Total revenues grew 29.6% year-on-year to 562.11 billion yuan, the report says. Unprofitable companies trimmed their losses by 9.7% to 16.55 billion yuan.
The background: The profit spike was largely expected as rampant demand for coal in China’s resurgent power, real estate and infrastructure sectors has contributed to an ongoing supply squeeze and driven prices higher.
The average price for one ton of coal on China’s benchmark Bohai Rim Steam-Coal index was 596.18 yuan in the first quarter, up 7.45% on the same period last year and 3.76% on the first three months of 2019.
Coal use in China, the world’s biggest consumer of the combustible rock, rose by 15.8% year-on-year in the first quarter and by 8.4% compared with the first three months of 2019, well before the pandemic started.
Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
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