As we have highlighted to our clients in Commodore's recent Weekly Dry Bulk Reports, China's coal production in April totaled 362.8 million tons. This has marked a month-on-month drop of 13.9 million tons (-8%) but is up year-on-year by 40.6 million tons (13%). While not setting a record (as was previously seen in March, December, November, and October), China’s coal production has nevertheless stayed quite strong. Prior to October, China had never even produced 352 million tons of coal in a single month.
It remains concerning for China’s coal import prospects that coal production has stayed so strong. Also remaining concerning is that coal production growth continues to fare much better than coal-derived electricity generation growth. Coal-derived electricity generation is at least likely to start finding growth again whenever covid restrictions do fully come to an end, but we expect that China's coal production growth will continue to be stronger. Coal-derived electricity generation totaled 400.8 billion kilowatt hours in April. This is 68 billion kilowatt hours (-15%) less than was produced in March and down year-on-year by 50.9 billion kilowatt hours (-11%). Our recent work has also examined how production of renewables sources of electricity in China have all continued to grow.
Overall, it is concerning for China’s coal import prospects that coal production has stayed so strong and coal-derived electricity generation has again contracted, but we still do not expect that any weakening in Chinese coal import volume would affect total global seaborne coal trade volume. There are enough other buyers for thermal coal, and we definitely still continue to expect that coal supply will simply be what is driving seaborne coal trade volume. Thermal coal demand from India, in particular, is poised to remain particularly robust. As we have been stressing in recent updates and reports for our clients, the Indian government has been becoming increasingly concerned about the possibility of coal shortages and power outages and has been directing utilities to significantly increase coal imports.
Also new more recently is that the Indian government last week began asking utilities to increase the proportion of imported coal from the previous 10% to 30% by March next year. In addition, India's Ministry of Power last week also announced that it will cut the amount of coal supplied to utilities by 5% if they fail to import coal for mixed power generation by June 15. The days of claims that India would stop importing coal (which we insisted would never happen anytime soon) are long gone, and now the government is continuing to work on increasing imports. This remains a wise decision in our opinion. We remain of our view that both the global energy crisis and food crisis are likely still only in their infancy. We continue to believe that all nations will be wise to continue to purchase as much food and energy as possible from any and all exporters going forward.