China's raw coal output continued its month-on-month recovery in September amid robust demand and relatively high coal prices, even as lingering rainfall in producing regions, overproduction inspections, and safety and environmental checks brought constraints.

In September, China produced 411.51 million tonnes of raw coal, sinking 1.8% from the previous year, which shrank by 1.4 percentage points from August, showed the latest data from the National Bureau of Statistics.

The output figure, hitting the third-largest level this year, was 5.38% or 21.01 million tonnes higher than the month before, expanding 2.88 pps from August's growth.

Daily coal production averaged 13.72 million tonnes in September, up 8.89% from August's 12.60 million tonnes but down 0.69% from 13.82 million tonnes in the same month last year.

Several factors underpinned the firmer monthly increase and the smaller yearly decline. Persistent heat kept electricity demand buoyant, while weather constrained some new energy generation, driving thermal power needs. Rising coal burns at power plants led to stronger fulfillment of long-term supply contracts, supporting mines' production.

Meanwhile, coal prices stayed relatively high despite modest fluctuations, fattening margins and improving miners' production enthusiasm.

While overproduction probes and safety and environmental checks continued to curb coal mining, their drag weakened as conditions normalized with gradual progress. Rainfall affected smaller areas compared with previous periods.

Additional support came from the gradual release of winter restocking demand, notably from the residential sector. Firm procurement from non-power sectors such as chemicals also improved spot sales at mines.

October's raw coal output historically dipped from September. Yet this year's October witnessed a lingering subtropical high prolonging heat in southern China, leading to high coal prices even during the off-season. This could encourage mines to accelerate capacity utilization.

Nevertheless, an unusual autumn rain spelled across the north, a likely headwind for mine operations. The month-on-month change in October remains to be seen, while the year-on-year downtrend is likely to persist.