China’s National Development and Reform Commission (NDRC) has announced in a joint teleconference with China’s State Administration of Coal Mine Safety (SACMS) and China Coal Transport and Distribution Association (CCTDA) that China is encouraging medium and long-term coal supply contracts between coal producers and buyers in order to maintain the stability of coal prices and of the market. In particular, contracts must include a basic price of RMB 535/mt ($77.65/mt) for 5,500 kcal/kg thermal coal effective as of December 1 this year, with reasonable price adjustments allowed according to fluctuations in the market.
As indicated by the NDRC, China is accelerating and increasing the release of coal capacity to ensure coal supply given the peak season for coal consumption as well as the increasing coal demand for heating purposes in China’s northern region. In particular, all legal coal mines conforming to safety standards can organize coal production based on 330 working days annually during the heating season (mid-November to mid-March), up from the previous 276 days, in order to guarantee coal supply.
Meanwhile, the NDRC stressed that it would strengthen coordination with transportation departments to increase coal shipments to ensure coal supply for power generation and heating purposes, especially to those key power plants and steel enterprises which support the livelihood of residents in China’s northern region. “We need to push forward optimal regulation on power resources, promoting the development of hydropower, nuclear power, wind power and solar power, to ease the supply pressure on regions where coal supply is tight,” the NDRC added.