China’s top economic planner said on Sunday that there was no basis for a significant price hike for coal, and prices will likely edge down in July, as hydropower and solar power generation is expected to pick up and more measures are prepared to ease a supply crunch.
Commenting on recent fluctuations of coal prices, the National Development and Reform Commission (NDRC) said that it would take various measures such as increasing coal output and imports to ensure supply during the summer peak.
Global coal prices remained high since May. According to financial platform Investing.com, Rotterdam Coal Futures reached $110 per ton on June 10, which was the highest point in five years. Last week, China’s steam coal futures broke records with a year-on-year increase of 60 percent, according to industry news website China5e.
Confronting the high price of coal, the NDRC has taken a series of steps to stabilize market supplies, including increasing the production of coal, according to a statement.
Since the middle of May, the amount of daily coal supply for power generation has decreased by about 10 percent from the previous month, and the market price for coal declined about 150 yuan ($23.23) per ton, the NDRC said.
The NDRC noted that the recent rebound in coal prices was the result of low trading volume affected by increasing offer prices, besides medium- and long-term contracts. Other factors include the power usage peak and the suspension of coal mines due to safety incidents.
At the end of May, factories in South China’s Guangdong Province were told by local authorities to curtail electricity use during peak hours, as electricity consumption has been increasing because of the accelerated recovery in business activities and the continued high temperatures.
Recent accidents at some coal mines also affected capacity nationwide. The NDRC said that it was making an effort to replace inefficient and risky coal mines with efficient and safe ones.
The planner vowed to ensure coal supply in the summer by adding domestic production and oversea coal imports. The NDRC will also monitor coal consumption at power plants and release coal reserves in a timely manner.
Source: Global Times