China’s coal prices have fallen for fear of government intervention in the tense energy sector as Beijing seeks to curb electricity costs and halt the crisis that has hindered the country’s economic growth.
Steam coal futures traded on the Zhengzhou Commodity Exchange Recording level Over the past few weeks, it has fallen by up to 8% on Wednesday for the second straight day to RMB 1,755 ($ 274) per ton. The CSI coal index for major Chinese-listed miners fell 8.5%.
The withdrawal added that the National Development and Reform Commission of China had organized a meeting with China’s largest coal producer, saying it would “consider concrete measures to intervene” if coal prices continued to rise. Was done in.
Soaring coal prices have forced many of China’s coal-fired power plants to reduce production in recent months under the low electricity prices set by the state, resulting in reduced production. Widespread power shortage.. The NDRC statement was the first sign of official intervention in coal prices.
China relies on steam coal for most of its electricity, but Beijing has closed its mines for pollution and safety reasons, and local governments have closed this year. Strict emission targets.. It contributed to the shortage of domestic supply, resulting in prices rising as winter approached.
Beijing to fight the crisis Ordered mine Boost the output.But with unstable weather Shanxi floodChina’s largest coal-producing state has hampered attempts to increase production.
China has also forced market reforms to encourage power generation, including forcing all coal-fired generators to sell to the wholesale market, raising electricity prices by up to 20% and raising price limits for some large users. Was introduced.
However, many analysts expect supply shortages to continue at least until the end of the year, with a focus on economic growth in China and the world.
“We expect China’s tight coal and electricity supply to continue into the winter,” said Tracy Cyan Liao, a commodity strategist at Citi.
Beijing has already distributed industrial electricity in support of housing consumption. Liao said a month-long energy crisis could require authorities to reduce industrial power generation by another 12% in the fourth quarter, “in the cold winter to ensure basic winter coal burning. Further reductions are needed. “
“This will increase the risk of stagflation and growth pressure on China and the global economy next winter,” she added.
Only about 10 percent of China’s coal supply is imported. In some regions, we have vowed to increase purchases in response to power shortages.
China imported 32.9 million tonnes of coal in September, 76 percent more than the same month last year, according to customs data released last week.
However, international prices are also at record levels, and last year China banned state-owned enterprises. Coal imports from Australia Geopolitical spats add to the strain on fuel supply.
China coal futures drop on threat of state intervention in energy crisis Source link China coal futures drop on threat of state intervention in energy crisis
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