China, the world's largest coal producer, increased production of the fuel by 11 percent in the first six months to meet increased demand from power generators.

Coal production reached 1.24 billion metric tons, the China Coal Transportation and Distribution Association said in a statement in Beijing today. Sales of the fuel rose 10.7 percent to 1.2 billion tons during the period, said Wang Zhanjun, vice president of the association.

China is having a coal supply shortage caused by an insufficient transportation network and after the country closed small unsafe coal mines to raise efficiency. The country has shut 2.5 percent of its coal-fired power plants due to fuel shortages, the State Grid Corp of China, the nation's largest power distributor, said July 7.

``Coal market will remain in `tight balance' and regional shortages may worsen in the second half,'' Wang said at the 2008 Asia-Pacific Coal Market Summit in Beijing today. ``China faces pressure to ensure thermal coal supplies.''

Coal stockpiles fell 2.9 percent to 145 million tons at the end of June, according to Wang. The nation's coal consumption increased 6.8 percent to 1.12 billion tons in the first five months, with the average price of the fuel jumping 19 percent to 307.66 yuan ($45) a ton, Wang said.