China's coal giant Shenhua Group lowered spot prices of thermal coal traded at northern ports by 10 yuan/t, sources reported, in response to the government's effort to prevent prices from rising too fast.
Effective September 28, the miner will reduce the spot price of its 5,500 Kcal/kg NAR coal to 660 yuan/t, the company said.
Shenhua will strictly carry out the annual long-term supply contracts to ensure stable supply to power plants and maintain market stability, it said.
China National Coal Group and Inner Mongolia Yitai Group, another two major coal producers in the country, also reduced spot prices by 10 yuan/t for thermal coal traded at northern ports from September 28.
On September 20, the country's top economic planner, the National Development and Reform Commission, called for relevant authorities to boost production and transport to ensure enough coal supply for winter heating and power sectors.
The commission also warned coal miners not to temporarily close to avoid inspections as the planner works to stabilize prices amid the environmental and safety checks.
Any problems should be identified and tackled actively in order to guarantee stable coal supply during the 19th CPC National Congress, and Beijing-Tianjin-Tangshan area should also strengthen transport dispatch and start coal storage in advance, the NDRC said.
Spot coal prices have been increasing faster at northern China ports this month, due to increased purchase from end users and speculative hoardings by traders, whereas supply from production areas were constrained by safety checks and a lack of rail capacity.
On September 28, the CCI spot index of the 5,500 Kcal/kg NAR coal was assessed at 716.0 yuan/t, surging 90 yuan/t or 14.38% from the end of August, showed data from industrial portal sxcoal.com.
(Writing by Alex Guo Editing by Harry Huo)
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