China's thermal coal futures fell 7.5% Thursday, after Beijing warned mining
companies not to raise prices and reiterated it would ensure sufficient
supply to stabilize the market.
Citing Reuters, the most-active thermal coal futures on the Zhengzhou
Commodity Exchange fell 3.5% to 836.2 yuan per tonne at 0330 GMT, after
falling 7.5% at one point.
However, the price of thermal coal is still up 24% this year, still less
than half of the highest price hit during the electricity crisis in October
last year.
Meanwhile, the price of coking coal futures, which is the most traded on the
Dalian Commodity Exchange DJMcv1, fell 5.4%.
China's National Development and Reform Commission (NDRC) summoned several
coal producers Wednesday, urging them to resume supply as soon as possible.
In addition, the NDRC asks local authorities to strengthen oversight and
keep coal prices within a reasonable range.
The warning is the latest in a series of steps to avoid another supply
crisis like the one that hit late last year, which led to widespread
electricity rationing and record coal prices.
"The NDRC's move is to cool future prices," Wood Mackenzie senior consultant
Yu Zhai said Thursday (10/2), told Reuters.
"We hope (the government) will encourage mines to resume operations after
the Lunar New Year holiday to increase domestic production to stabilize
Qinhuangdao (spot) prices soon," he said.
Qinhuangdao thermal coal prices were 1,010 yuan per tonne as of Wednesday
(9/2), up more than 26% this year, according to Shanghai Steelhome
Information Technology.
Total coal inventories at China's main ports stood at 46.88 million tonnes,
the lowest in a year, before the Lunar New Year holiday rolled around on
January 31, according to data from the China Coal Transportation and
Distribution Association.
Coal production by central state-owned enterprises (SOEs) will exceed 1
billion tonnes in 2021, a record high, the State Assets Administration and
Supervision Commission (SASAC) said in a statement Thursday (10/2).