China NDRC studying mechanism to stabilise coal prices over long-run By Reuters
© Reuters. FILE PHOTO: China Vitality coal-fired energy plant is pictured in Shenyang, Liaoning province, China September 29, 2021. REUTERS/Tingshu Wang
SINGAPORE (Reuters) -China’s prime financial planner stated on Tuesday it was learning a mechanism to stabilise coal costs over the long term, in its newest transfer to chill the red-hot market.
The Nationwide Improvement & Reform Fee (NDRC) is trying into the prices and profitability of the coal sector in an effort to work out such a mechanism that may information costs to maneuver inside an inexpensive vary, it stated.
The NDRC can be contemplating to incorporate coal into the class of “prohibiting exorbitant earnings”.
The brand new mechanism will probably be based mostly on a benchmark worth plus a floating vary, after taking into consideration prices, affordable margins and market modifications, it added.
“The mechanism shall be linked to the marketisation of the thermal energy sector … and those that don’t strictly comply with the mechanism will probably be severely punished,” it stated.
Whereas China thermal coal futures have come off document highs since final week after Beijing pledged to intervene, they’re nonetheless up about 150% year-to-date.
The contract final traded at about 1,233 yuan per tonne, down 7% by 0155 GMT.
The federal government has indicated that 500-570 yuan per tonne is the affordable vary for long-term thermal coal contracts.
On Monday, the NDRC stated it might examine index suppliers in a bid to tame runaway costs.
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