Mr Clyde Russell, a Reuters columnist, wrote that something doesn't quite add up with China's rising steel production but falling coal output and imports so far this year.

According to data from the National Bureau of Statistics, China's raw steel output was 480.76 million tonnes in the first 7 months of 2014, up 2.7% from the same period a year earlier.

However, imports of metallurgical coal were down 12.6% to 36.01 million tonnes in the first seven months of the year. Given that imports only meet roughly 10% of China's coking coal needs, it's essential to look at domestic coal output.

According to data from the China Coal Transport and Distribution Association, total coal production in China in the first seven months of the year was 2.163 billion tonnes, a decline of 1.45% on the same period in 2013, with July's output down 1.63% from the same month last year.

What isn't clear is the breakdown of thermal to coking coal within those broader production figures. This means that while overall coal output is lower in 2014, it may be that coking coal's share of this has risen relative to thermal coal, which would offer an explanation for the mismatch between rising steel output and lower domestic coal output and imports.

However, a closer examination of the figures shows that coking coal output would have to have made major gains to account for the discrepancy. To produce the 480.76 million tonnes of steel would take about 370.2 million tonnes of coking coal, using the World Coal Association's average of 770 kilograms of coking coal to one tonne of steel.

China has for the past two years produced coking coal to thermal coal at a ratio of close to 1 to 7. If this ratio is applied to the 334.2 million tonnes of coking coal the steel industry would have needed from domestic sources in the first seven months of the year, it would suggest total coal output of 2.339 billion tonnes.