Coal prices dive in China after government’s intervention plans

Coal prices dive in China after government’s intervention plans

The thermal coal futures in China plunged almost 13 per cent on Friday. It extended further losses since Tuesday after the communist government pledged to intervene in the rising prices for helping the electricity producers struggling with the widespread power generation crunch. 

The most active and one of the biggest thermal coal futures declined to 1,384 yuan per tonne at  11:30 Beijing time (0329 GMT). It was down by more than 30 per cent since Tuesday’s (1982 yuan per tonne) all-time high. 

On the other hand, coking coal plunged to 9.91 per cent, while coke futures inched down to 7.42 per cent during the morning trade on the Dalian Commodity Exchange. Notably, it fell the maximum of 12 per cent on Thursday’s daytime trade. 

The growing power outage in China due to the coal shortage has led to a surge in fuel prices. In addition, the rising post-pandemic needs by industries has also resulted in the hike. Moreover, the country is trying to move on to greener sources of energy as an alternative.

Meanwhile, China has stopped working and production in several factories following the less power supply. Moreover, the government is forcing miners to expedite coal production and increase the imports for helping power stations rebuild stockpiles ahead of the winter season.

As per the managing director of Navigate Commodities, Atilla Widnell, they were witnessing good results after the government gave a full go-to coal mining company. It even offered them relaxation in safety norms during inspections in some cases. The fear of the buyers was represented by the parabolic pricing action. They were unable to bring sufficient volumes for coke ovens and power plants. 

He added that they were waiting for the prices to fall as quickly as they rose. 

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