SHANGHAI, Oct. 19 (SMM)--Hunan adjusted coal price regulation fund starting October 1st, cutting non-thermal coal price regulation fund from RMB 30/mt, to RMB 10/mt. Thermal coal transferred to the provincial grid’s fire power plants by coal producers is not subject to the regulation fund.

While Guizhou and Henan raised coal price regulation fund, Henan unexpectedly cut it, which is hard to understand.

But according to Steelease sources, Hunan cut coal price regulation fund in order to secure coal supply in the province. Power load in Hunan will peak 20 million KWH in the winter, up 18.1% YoY, with power supply shortages expected to be 5 million KWH. Hunan province has held several special meetings to encourage coal enterprises to sell thermal coal directly to power plants, and require power generation enterprises to meet the monthly power generation target by the provincial government. In addition, Hunan released a compulsory measure  requiring that all coal producing cities, counties as well as Xiangmei Group should finished the target to produce 20 million mt of thermal coal. The enterprise failing the target will be levied coal price regulation fund by RMB 200/mt, and any enterprises missing a large part of the target will be punished by administrative measures. If necessary, Hunan will set levy and inspection stations in relevant cities and prefectures, levying coal price regulation fund by RMB 200/mt. As such, Hunan is determined to secure thermal coal supply in the province.