China set to abolish limit on coal prices
By Richard Fu |
December 22, 2012, Saturday
|
Print Edition
Print Edition
CHINA will abolish a price ceiling on power-station coal from the beginning of 2013 as rates have fallen this year amid increased supplies.
The government capped spot prices at 800 yuan (US$128.40) a ton for coal with a heating value of 5,500 kilocalories a kilogram at the start of this year to stem heavy losses from power plants.
"As the demand and supply situation for thermal coal has been easing and prices have been stabilizing nationwide, the temporary price intervention will be lifted, effective January 1, 2013," the National Development and Reform Commission said in a statement yesterday.
Prices will then have to be negotiated between miners and power plants, according to the NDRC.
Thermal coal was last quoted around 635 yuan a ton in Qinhuangdao, the main port in north China where coal prices are considered as a benchmark for the industry.
The NDRC also asked provincial authorities to strictly monitor prices after the removal of the cap.
Although China has liberalized its coal market, the country's top economic planner has had to intervene to ensure supplies for power plants.
The government capped spot prices at 800 yuan (US$128.40) a ton for coal with a heating value of 5,500 kilocalories a kilogram at the start of this year to stem heavy losses from power plants.
"As the demand and supply situation for thermal coal has been easing and prices have been stabilizing nationwide, the temporary price intervention will be lifted, effective January 1, 2013," the National Development and Reform Commission said in a statement yesterday.
Prices will then have to be negotiated between miners and power plants, according to the NDRC.
Thermal coal was last quoted around 635 yuan a ton in Qinhuangdao, the main port in north China where coal prices are considered as a benchmark for the industry.
The NDRC also asked provincial authorities to strictly monitor prices after the removal of the cap.
Although China has liberalized its coal market, the country's top economic planner has had to intervene to ensure supplies for power plants.
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