<article><p class="lead">China's second biggest coal-producing province of Shanxi has suspended operations at four mines for violating safety rules. This may further reduce domestic coal supplies.</p><p>Operations at the mines were suspended after the Shanxi emergency administration conducted safety checks at 24 local mines during 11-21 April. The administration identified 384 violations of safety regulations and the four mines were fined 3.94mn yuan ($608,000). </p><p>The administration will take stricter safety measures at local mines, partly to avoid embarrassing accidents as China will this year celebrate the 100th anniversary of the founding of its communist party on 1 July. </p><p>The Shanxi emergency administration did not provide the names or the production capacity of the four mines that were suspended. But the move may curtail government plans to raise national coal production, even though domestic power demand is expected to rise over the summer. </p><p>Besides safety-related restrictions, Beijing has also started investigations into alleged corruption in the coal sector in Shanxi and Shaanxi provinces that go back 20 years. This may also disrupt coal production in the two major producing provinces, just like what similar investigations in Inner Mongolia have done. </p><p>Coal production in Inner Mongolia reached 85.72mn t in March, down by 5.8pc on the year because of the corruption probes and restrictions on sales permits. </p><p>Stocks at the major coal transshipment hub of Qinhuangdao in north China hit a 13-month low of 3.97mn t on 22 April, according to coal industry association the CCTD. Inventories rebounded slightly to 4.33mn t yesterday but were still well below 5.91mn t a year earlier. </p><h3>Domestic prices steady ahead of holiday</h3><p class="lead">Domestic coal prices were steady this week as utility purchases slowed ahead of China's five-day Labour Day holiday from 1 May. </p><p>China has not yet released its hydropower output data for this month. But hydropower output usually starts to increase in April with the onset of rainy weather. Water outflow from the Three Gorges dam reached 14,900 m³/s yesterday. This was up by 45pc from a year earlier, probably indicating stronger hydropower output.</p><p>Bids for Chinese domestic NAR 5,500 kcal/kg coal were at Yn795-800/t fob ports in north China today against offers at around Yn810-820/t. <i>Argus</i> last assessed this market at Yn807.92/t fob Qinhuangdao port on 23 April.</p></article>
