East China's Shandong province has decided to further cut its coal output to stabilize the price amid faltering demand, state media reported.
According to Xinhua News Agency, local coal miners, which have sold coal of inferior quality or suffered losses, are asked by the provincial coal industry bureau to limit or cut their productions, aiming to slash the province's total output by 6.6%.
Shandong has set an annual target of 150 million tonnes at the beginning of the year. Presently, coal stocks at Shengli Oilfield Power Plant, a large state-owned one located in Shandong, are staying at an extraordinarily high level, which could last for 40 days. The plant's purchase price for Shanxi thermal coal of 5500 kilocalorie per kilogram NAR has dropped CNY 150 per tonne from one year ago to CNY 660 per tonnes, including VAT.
The province has been cutting coal production since August 2012. It ordered small coal mines with an annual production capacity below 300,000 tonnes to halt production for rectification during the month. Last year, Shandong produced 154 million tonnes of raw coal, staying around 150 million tonnes for nine years in a row.