Some of China’s major coal miners have pledged to cap prices this winter and next spring, following the government’s order to maintain stable coal and power supplies. The National Development and Reform Commission said the government was discussing intervention in coal prices. Separately, Chinese Vice Premier Han Zheng has urged producers to take measures to maintain prices.
China Energy Group and Shanxi Jinneng Holding Group said they would boost production and drive prices back to a “reasonable range.” The companies promised to keep spot prices of 5,500-kilocalorie thermal coal delivered to Bohai Bay at lower than CNY1,800 ($282) per ton. They also vowed to keep prices for 5,000-kilocalorie and 4,500-kilocalorie coal at no more than CNY1,500 ($235) and CNY1,200 ($188) per ton, respectively, and prices of thermal coal with higher energy content at below CNY2,000 ($313) per ton. Trading sources said that two other state-backed miners operating in Shanxi and Inner Mongolia also intended to roll out a similar pricing plan.
Domestic thermal coal prices have jumped more than 200% since the beginning of the year to record highs as strict safety inspections, anti-corruption investigations, and floods hurt supplies from major mining regions. Thermal coal futures contract on the Zhengzhou Commodity Exchange hit a record high of 1,982 ($310) per ton on Tuesday before dropping 8% on Wednesday.
