First-quarter earnings reports from Chinese coal producers point to a sharp industry-wide downturn. Of the 22 listed coal companies that have released results so far, 19 reported year-on-year declines in net profit attributable to shareholders, with 15 seeing drops of around 20%, according to Yicai.
Original By NLS
First-quarter earnings reports from Chinese coal producers point to a sharp industry-wide downturn. Of the 22 listed coal companies that have released results so far, 19 reported year-on-year declines in net profit attributable to shareholders, with 15 seeing drops of around 20%, according to Yicai.
The decline comes despite a steady rise in coal output. China produced approximately 1.2 billion tonnes of raw coal in Q1, up 8.1% from a year earlier. However, price pressures weighed heavily on earnings. Industry leader China Shenhua reported revenue of RMB 69.59 billion, down 21.1% year-on-year, while net profit fell 18% to RMB 11.95 billion. China Coal Energy saw net profit drop 20% to RMB 3.98 billion, and Yancoal's profit slumped nearly 28% to RMB 2.71 billion.
The soft performance reflects a milder-than-usual winter that curbed seasonal demand for heating and electricity. At the same time, record output from renewables displaced coal-fired generation, further depressing consumption and prices.
The China National Coal Association noted that the market has remained oversupplied since the start of the year, with prices falling sharply. Looking ahead, it expects demand to gradually stabilize. But with seasonal demand easing, non-fossil power expanding, and macroeconomic growth steady but moderate, coal supply is likely to stay ample—and prices may remain under pressure.