China’s thermal coal price fell 11%, continuing the downward trend from Tuesday (October 19) because Beijing signaled intervention to cool down prices.
China’s thermal coal price on October 22 fell to 1,587.4 CNY (equivalent to 248.28) per ton. Thermal coal prices have fallen nearly 20% from the record high of 1,982 CNY/ton touched on November 20, although coal futures prices have so far more than tripled.
The policy-making body, the National Development and Reform Commission (NDRC), which organizes a meeting of key coal companies and industry associations, said it was studying ways to intervene in coal prices. high and will take all necessary steps to bring the price of coal to a reasonable level
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Factors affecting the demand for coal in the world (Source: ACBS)
According to the NDRC, Chinese law allows the State Council, the cabinet and regional governments to limit profits and set price limits when the price of important goods or services rises sharply, and pledges to prevent any irregularities to maintain market stability.
A shortage of coal, China’s main fuel for electricity production, has affected the allocation of electricity to industry in many regions of China and slowed the economic growth of the country’s second-largest economy. two worlds.
China is the world’s largest producer and consumer of coal – the country’s main source of electricity, and the Chinese state has been increasing domestic production to meet demand.
The NDRC said it will ensure coal mines operate at full capacity and aim to reach output of at least 12 million tonnes per day. Bringing the production rate to a 2021 peak of more than 11.6 million tons as of October 18, an increase of more than 1.2 million tons compared to the end of September after making every effort to boost supply including approval of new coal mines.
China’s energy regulator has urged grid companies to maximize their electricity purchases from renewable sources. Several major coal mining companies have announced that they will increase coal production in the near future.
Source: VINANET/VITIC/Reuters
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