China’s National Development and Reform Commission, or NDRC, said on July 15 it plans to release more than 10 million mt of coal into the market, in an aim to alleviate domestic supply tightness.
In order to ensure a consistent supply of coal during the peak summer season, NDRC plans to release from its coal reserves to various ports and storage facilities around the country in batches to maintain supply stability.
Since the beginning of 2021, the state has injected more than 5 million mt from the national coal reserves into the market to address supply and demand imbalances, according to the commission.
China produced 1.62 billion mt of coal from January-May 2021, a year on year increase of 8.8% from 1.49 billion mt, according to data released June 17 by the National Bureau of Statistics of China.
With exception of Australian coal, restrictions on imported coals are to be lifted to address domestic supply tightness, NDRC announced on July 9. To address over purchases, days of coal burn availability have also been lowered for coal-fired power plants from 15 days to 7-12 days, with 7 days being the minimum.
In the same announcement, NDRC aimed at reining in the country’s domestic coal prices by setting a price cap for China’s domestic 5,500 kcal/kg NAR prices at Yuan 950/mt ($147.05/mt).
Domestic prices remained upbeat over the past few weeks, with offers for China’s domestic 5,500 kcal/kg NAR heard at around Yuan 990/mt – Yuan 1,000/mt ($153.25/mt – $154.75/mt) on July 14, despite NDRC’s expectations that prices for domestic coal will decrease after the Chinese Communist Party’s centenary celebrations.
With the tight domestic supply in China, the demand has spill over into the seaborne market, pushing Indonesian coal prices to its record highs, with 4,200 kcal/kg GAR prices hitting a record high of $66/mt FOB on July 14, S&P Global Platts data showed.
Source: Platts