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China’s state planner vowed to deploy stronger forces to stabilise coal prices and punish price gouging as new coal price caps come into effect.
The National Development and Reform Commission (NDRC) in February set price caps for the benchmark 5,500 kcal thermal coal at Qinghuangdao Port at 770 yuan (US$115.46) a tonne for term contracts and at 1,155 yuan a tonne for spot cargoes, effective from May 1.
China’s central government aim to balance the profits of coal miners and power generators after the country was gripped by widespread power shortages over record high coal prices last year.
Despite efforts to optimise its energy mix, coal still contributes about 60 per cent of China’s total power generation.
“China must take practical measures to stabilise coal prices … which therefore will stabilise power prices and energy costs at enterprises, and will provide strong support for China to reach stable economic growth,” the NDRC said in a statement on Friday.
The NDRC has also set out price guidance for ex-pit coal in the major mining regions of Inner Mongolia, Shanxi and Shaanxi.
Once coal prices exceed the reference ranges, the NDRC will immediately step in and call for a legal investigation into suspected price gouging.
China’s thermal coal futures contract for May delivery was up 3 per cent to 859.6 yuan a tonne on Friday.