China’s thermal coal futures on the Zhengzhou Commodity Exchange fell the maximum of 14% to CNY1,365 ($213) per ton at the start of Thursday’s night session. The contract has declined by its trading limit for the third straight evening session after the National Development and Reform Commission (NDRC) said it was considering intervening in the market to drive prices back to a reasonable range.
The futures prices settled down 11% at the end of day-time trade, bringing the total decline in prices since Tuesday’s record high of CNY1,982 ($310) to more than 31%. The contract was down 10.6% at CNY1,420 ($222) as of 1354 GMT, still up nearly 170% since the start of the year. Metallurgical coal and coke futures on the Dalian Commodity Exchange were both trading down around 6% on Thursday evening, having dropped by the maximum of 12 % in day-time trade.
Despite the recent drop, energy prices remained elevated and are expected to be passed down onto end users soon, analysts said. Beijing has taken some measures to cool down the overheated commodity market, including by ordering domestic miners to boost their coal output. Some state-backed coal producers have already pledged to ensure supplies and cap prices. China’s coal demand is likely to continue rising in the coming months as temperatures in the country’s central and eastern regions are expected to be significantly below normal levels.
