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UPDATE 2-China's coal output grows fastest in years in May on summer outlook
June 14, 2017 / 2:51 AM / 3 months ago

UPDATE 2-China's coal output grows fastest in years in May on summer outlook

* May output rises 12 pct on year earlier

* Miners anticipating higher summer demand

* International and domestic prices rallied on Wednesday

* Inventory at Qinhuangdao port fell sharply (Adds international prices and bullets)

BEIJING, June 14 (Reuters) - China’s coal production rose 12 percent in May from a year ago, its fastest pace of growth in years, as miners ramped up output ahead of an expected summer pick-up in demand, official data showed on Wednesday.

Coal output rose to 297.8 million tonnes in May, the National Bureau of Statistics data showed, slightly above April’s 295 million tonnes. For the year to date, coal production has risen 4.3 percent to 1.4 billion tonnes.

Unusually hot weather at the start of summer has helped spur demand for coal, while miners have enjoyed more relaxed regulations on production. May’s production jump was the fastest in at least two years, according to Reuters data.

Strong Chinese demand has helped push up international thermal coal prices.

Prompt coal prices for cargoes from Australia’s Newcastle export terminal, which are seen as Asia’s benchmark, have shot up 18 percent since mid-May to $84 per tonne.

China’s domestic thermal coal prices have risen more than 16 percent this year, reaching record highs on Wednesday of 570.6 yuan ($83.94) per tonne. Open interest also hit a record on Tuesday, reflecting bullish sentiment.

Inventory at Qinhuangdao port, China’s largest coal transportation hub, fell to 5.3 million tonnes by June 12, down from 6 million tonnes month ago.

As many of China’s major cities in north and southern regions brace for a warmer-than-usual June, coal consumption from the largest coal-fired power plants has picked up to provide power for airconditioners.

Production of steelmaking raw ingredient coke fell 1.5 percent to 37.2 million tonnes in May, but was up 3.7 percent for the first five months of the year to 182.8 million tonnes. ($1 = 6.7975 Chinese yuan renminbi) (Reporting by Meng Meng and Josephine Mason; Editing by Richard Pullin)

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