Has Coal Price Passed Its Peak?…China's Market Intervention Policy Causes Sharp Price Drop

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the Chinese government announced its intention to intervene in the coal market to overcome the energy shortage, coal futures prices have been falling.

On the 29th, Bloomberg reported that the National Development and Reform Commission (NDRC), China's main economic development planning agency, stated that "coal production prices are expected to fall further."

On the same day, at the Zhengzhou Commodity Exchange in China, the futures price for thermal coal traded at 960 yuan per ton, down as much as 8.7% compared to the previous trading day.

This is the lowest level since the 14th of last month.

Coal futures prices have plummeted by 45% since reaching a peak on the 19th.

Accordingly, the stock prices of major Chinese coal production companies have also been reported to be declining.

On the Hong Kong stock market that day, Yanzhou Coal Mining Co. was trading at 22.44 yuan at 2:45 PM Korean time, down 2.8% from the previous trading day.

This decline in coal prices comes amid recent pressure from the Chinese government on domestic coal producers to increase production.

As China faced difficulties in power generation due to coal supply shortages, the government has expressed its willingness to intervene in the coal market to resolve the power shortage.

The government is also reportedly considering setting a price ceiling on coal to reduce the financial burden on power generation companies.

In addition, to prepare for winter power demand, the government is urging mining companies nationwide to supply an additional 100 million tons of coal by the end of the year.

This content was produced with the assistance of AI translation services.