China has witnessed frequent coal mine accidents this year, and a series of severe accidents in November highlighted the gravity of safety situation despite tightening inspections.

 

On November 16, 26 people were killed in a fire accident at a mining company office building in Luliang, Shanxi, and only 12 days later, 11 miners were taken lives by rock burst accident in Heilongjiang on November 28.

 

The death toll from coal mining accidents in China's top coal producing province Shanxi had surged to 100 in 87 accidents as of November 18 this year, according to a work safety guidance issued by China's cabinet the State Council on November 24.

 

Incomplete statistics showed there were 57 coal mine accidents across the country as of September 24, causing 160 deaths.

 

To contain this trend, government authorities including the State Council, the National Mine Safety Administration and the Ministry of Emergency Management have announced to escalate safety overhaul.

 

A team from the State Council's Security Committee would be stationed in Shanxi from late November until the end of May 2024, the State Council said.

 

The provincial governments in Shanxi, Shaanxi, Inner Mongolia, Shandong and Ningxia have also taken measures to strengthen safety supervision over coal mines in the winter peak demand period.

 

As such, stringent safety checks are expected to be in place throughout this heating season, constraining the release of coal production capacity at coal mines.

 

Meanwhile, overproduction would be strictly forbidden, and coal miners are required to arrange production as per approved capacity.

 

With growing prudence over safety issues, some miners are likely to scale down production after completing long-term contract coal deliveries, leading to lower supply as a whole. Many coal mines are also inclined to do so after completing annual output tasks.

 

While the effect on coal supply is still uncertain, there is no doubt that market sentiment has been influenced.

 

The market could overreact to possible aftermaths of mine accidents at a time when spot coal prices are in weak balance, especially if participants grow more optimistic about demand perspective in the peak season.

 

Safety inspections and cold weather would increase the need for restocking by both power and non-power end users, analysts said, helping support coal prices in the near term.