China eyes steady coal prices with increased supply

28th May 2018

China’s coal prices are expected to remain stable and will not soar with increased supply and regulatory efforts, an official for China’s top economic planner said Friday.

Increased demand for power station coal and higher prices of steam coal futures have contributed to a coal price rebound since April, said the unnamed official with the economic operations adjustment bureau at the National Development and Reform Commission.

The market, however, does not support a spike in coal prices with remarkably boosted supply partly due to cuts in inefficient capacity, the official said, adding that China’s coal prices have retreated markedly from a streak of gains since the second half of 2017.

During the Jan.-April period, output in Shaanxi, Shanxi, and Inner Mongolia, the country’s main coal producers, increased by 60 million tonnes year on year, and is estimated to increase by 250 million tonnes this year.

Adequate stocks of coal in power plants, improved coal transport, and consumption of more clean energy will also prevent a surge in coal prices, said the official.

Meanwhile, China will take multiple measures to stabilize coal prices, including adding production and introducing more efficient capacity.

Keeping coal prices reasonable will be a win-win, as it will help cut electricity prices, especially for industrial and commercial businesses, while expediting China’s overcapacity cuts and supply side reform in the coal sector, the official said.

Source: XINHUA