BEIJING : China’s thermal coal futures fell by their trading limit for the third evening session in a row on Thursday, extending losses triggered by signs Beijing may intervene to cool surging prices and ease a widespread power crunch.
China is pushing miners to ramp up coal production and is increasing imports so that power stations can rebuild stockpiles before the winter heating season, but analysts say shortages are likely to persist for at least another few months.
The state planner, the National Development and Reform Commission (NDRC), said on Tuesday it was studying ways of intervening to lower coal prices and would take all necessary steps to bring them into a reasonable range.
At the start of Thursday’s night session on the Zhengzhou Commodity Exchange, the most-active thermal coal futures contract, for delivery in January, plummeted the maximum 14% to 1,365 yuan ($213) per tonne.
That came after the contract finished day-time trade down 11% and brought the overall decline in prices since Tuesday’s all-time peak of 1,982 yuan to more than 31%.
The contract was trading down 10.6% at 1,420 yuan as of 1354 GMT, still up almost 170% year-to-date.
Coking coal and coke futures on the Dalian Commodity Exchange were both trading around 6% lower on Thursday evening, having fallen by the maximum 12% in day-time trade.
Despite recent swings in coal prices, higher energy, labour and other costs are now expected to persist and be passed on to end-consumers, economists and analysts have said. read more
Chinese law allows the State Council, the country’s cabinet, and regional governments to limit profit rates and set price limits when prices for important goods or services rise sharply, the NDRC said earlier this week. It vowed to crack down on any irregularities and maintain market order.
On Thursday, the NDRC said it had mobilised its regional arms as well as key coal enterprises to conduct a special survey on coal output and distribution costs and prices as part of its research into how to intervene. [nP8N2RE02D
A shortage of coal, China’s main fuel for power generation, has led to electricity rationing for industry in many regions, weighing on growth in the world’s second-biggest economy.Read More…
Source : reuters
