China's coal mining and power sector capacity utilisation rates fell to record lows in the second quarter, weighed by seasonal demand weakness and rising renewable energy output.

The coal mining and washing industry's capacity utilisation rate stood at 61.2% in the April-June period, down 8.1 percentage points from a year earlier and 5.2 percentage points from the first quarter, according to data from the National Bureau of Statistics (NBS). The reading was the lowest since the NBS began publishing the data.

The second quarter is traditionally a slack season for coal consumption, with heating demand ending and downstream industries such as power and steel cutting operating rates amid weak demand. Coal mines adjusted output to maintain smooth production.

At the same time, strong renewable energy output and continued rapid growth in hydropower reduced the share of coal-fired power generation, structurally curbing coal consumption growth.

A coal mine accident in Shanxi triggered nationwide safety inspections, leading to more mine suspensions and output cuts, limiting capacity flexibility.

China's raw coal output by large-scale mines totalled 2.365 billion tonnes in the first half of the year, with 1.203 billion tonnes produced in the first quarter and 1.162 billion tonnes in the second quarter, NBS data showed.

Looking ahead, the coal sector's capacity utilisation rate is expected to remain lower year on year in the third quarter under a "stable output" policy. However, the peak summer season typically boosts power demand, likely lifting utilisation slightly from the second quarter.

In the power sector, the utilisation rate for electricity, heat, gas and water production and supply stood at 70.4% in the second quarter, down 1.1 percentage points from a year earlier and 1.5 percentage points from the fourth quarter of 2025. That was the lowest since the second quarter of 2020 and the second-lowest on record.

Although power loads hit new highs early this year, the pace of economic recovery slowed in the second quarter, with industrial and total electricity consumption growth falling short of expectations. Heavy rainfall in southern China also kept temperatures low, dragging down equipment utilisation.

Rising renewable energy capacity and ample hydropower from abundant rainfall pushed total power supply growth above demand growth, weighing on overall capacity utilisation.

Weak wind resources and insufficient grid absorption capacity raised the curtailment rate for wind and solar power, reducing average utilisation hours and dragging down the sector's overall rate.

Higher coal-fired power prices in the second quarter pushed up thermal power costs, while falling market-based electricity prices squeezed profit margins, prompting some high-cost units to reduce loads.

The power sector is highly sensitive to temperature changes. The third quarter typically sees higher utilisation rates due to peak summer demand, but new renewable capacity additions may dilute some traditional capacity utilisation.

Overall, China's industrial capacity utilisation rate for large-scale enterprises stood at 73.0% in the second quarter, down 0.6 percentage points from the first quarter and 1.0 percentage point from a year earlier.

By sector, mining capacity utilisation was 69.1% in the second quarter, manufacturing was 73.5%, and the electricity, heat, gas and water production and supply sector was 70.4%.

By major industry, capacity utilisation rates in the second quarter were: coal mining and washing 61.2%, food manufacturing 70.2%, textiles 74.9%, chemicals 69.4%, non-metallic minerals 59.6%, ferrous metal smelting 77.6%, non-ferrous metal smelting 76.2%, general equipment manufacturing 80.1%, special equipment manufacturing 76.7%, auto manufacturing 70.8%, electrical machinery 70.3%, and computer and electronics 78.7%.