China coal: Beijing blasts coal index providers as it moves to keep price within ‘reasonable range’
- Nation’s supply of thermal coal has increased by more than 30 per cent since October, according to the state economic planner, but price remains relatively high
- NDRC says it consulted power companies for advice on setting the pricing range for coal to restrict wild fluctuations
Beijing is taking steps to tighten its regulations over China’s coal market amid ongoing concerns over a power shortage and rising factory-gate inflation.
The nation’s top economic planner, the National Development and Reform Commission (NDRC), recently held meetings with coal-fired power companies and economic and legal experts, soliciting suggestions for a long-term pricing mechanism.
On Friday, the NDRC said representatives from the consulted power plants offered advice on what that “reasonable range” should be at key mines and ports.
The planner also disclosed the preliminary results of a probe into the nation’s 12 coal index providers, in a bid to tame runaway coal prices. It revealed that some of the providers were found to have violated rules, and the penalties could include seeing their index publications suspended, being added to credit blacklists, or even being subjected to legal action.
“[Some indices] misguided the market, and to some extent this led to coal prices deviating from the fundamentals of supply and demand,” the NDRC said earlier this week.
The planner also noted that some of the consulted experts suggested that mid- to long-term purchasing contracts should be encouraged for coal companies, power plants and powers users, while a coal-electricity price linkage mechanism could be established in the contracts between electricity companies and users.