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China April coal output down 7.4 percent on year - statistics bureau

BEIJING (Reuters) - China's coal output in April fell 7.4 percent from a year ago to 298 million tonnes, the country's statistics bureau said on Wednesday, with the industry hit by declining economic growth and efforts to cut consumption of polluting fossil fuels.

Production in the first four month as a whole reached 1.15 billion tonnes, down 6.1 percent compared to the same period last year, the National Bureau of Statistics said.

The Chinese coal sector has been struggling with chronic oversupply and a collapse in prices, with more than 80 percent of mining firms suffering losses, the China National Coal Association estimated last month.

The government, currently engaged in a war on pollution, has been attempting to carry out a careful balancing act, trying to reduce its dependence on coal while at the same time protecting a sector that provides nearly 6 million jobs nationwide.

In a meeting last week, the National Development and Reform Commission reiterated plans to curb output and shut down unsafe and low-grade mines.

Wang Xianzheng, chairman of the China National Coal Association, told the meeting that industrial profits in the sector fell 61.9 percent in the first quarter of 2015, and he called for more tax cuts for mining firms.

But despite efforts to curb output, prices have continued to fall, with thermal coal at the port of Qinhuangdao (SH-QHA-TRMCOAL) down more than 20 percent so far this year.

"There is still new capacity coming into operation and there are now more than 11,000 mining firms - there is certainly cut-throat competition," said Yang Fuqiang, senior energy specialist with the Natural Resources Defense Council in Beijing.

Declining economic growth has hit the sector hard, with demand for key power-consuming products dipping over the course of this year. Official data on Wednesday showed that crude steel production fell 1.3 percent in the first four months of 2015, while cement output dropped 4.8 percent over the period.

Efforts to encourage renewable power and cut coal-fired electricity use also appear to be having a negative impact.

China's overall power output rose 1 percent in April to 445 billion kilowatt hours (kWh), but thermal power production - more than 90 percent of which is derived from coal - dipped 2.8 percent to 340.9 billion kWh, and is down 3.5 percent so far in 2015.

The April figures mark the first time China has reported official monthly coal production data since June 2010.


(Reporting by David Stanway and Kathy Chen; Editing by Himani Sarkar and Joseph Radford)