The National Development and Reform Commission requires that coal prices covered by medium-and long-term coal contracts for power generation and heating enterprises will return to a reasonable range.

Recently, the General Office of the National Development and Reform Commission issued a notice to all localities and relevant enterprises to make arrangements for the full coverage of medium-and long-term coal contracts for power generation and heating enterprises, requiring that medium-and long-term coal contracts be directly guaranteed and fully covered for power generation and heating enterprises. ensure the need for coal for power generation and heating, and keep the bottom line of coal for people's livelihood.

The NDRC requires that power generation and heating enterprises and coal enterprises sign a number of medium-and long-term contracts on the basis of the medium-and long-term contracts already signed this year, increasing the proportion of medium-and long-term contracts in annual coal consumption of power generation and heating enterprises to 100%.

Market participants pointed out that at present, major coal enterprises have signed a long-term association with power plants, but the proportion of long-term association coal is different. In order to maintain the bottom line of coal for people's livelihood and ensure the demand for coal for power generation and heating, it is expected that regulators will continue to make efforts in the "guaranteed supply" policy, coal prices will tend to stabilize in the later stage, and the cost of power plants will also be reduced.

According to a reporter from the Financial Associated Press, the Development and Reform Commission has recently stressed that local economic operation departments and relevant central enterprises have further implemented their main responsibilities, signing a number of medium-and long-term contracts before the end of September on the basis that power generation and heating enterprises and coal enterprises have signed medium-and long-term contracts this year, while requiring power generation and heating enterprises to directly guarantee full coverage of medium-and long-term contracts for coal in 2022.

Authoritative sources pointed out that the policy guidance is to further play the role of "ballast stone" in coal medium-and long-term contracts, while ensuring the need for coal for power generation and heating this winter and next spring, and keeping the bottom line of coal for people's livelihood.

This measure not only adjusts and optimizes the flow direction of coal supply, especially the coal mine with new production capacity, but also directs the supply increment to power generation and heating enterprises, and comprehensively ensures the key rigid demand links of people's livelihood. and give full play to the role of medium-and long-term contracts to stabilize coal prices and reduce the cost of coal used by power generation and heating enterprises.

Coal supply will be expanded through multiple channels, and coal prices will return to a reasonable range.

In 2020, the coal consumption of China's power generation and heating industry is 2.375 billion tons, accounting for about 59% of China's coal consumption. In the past, if the coal price is too high, the downstream power heating industry may lose money, which will lead to the phenomenon of power shortage and power restriction, which will have a great impact on the national economy and people's livelihood.

Under the background that the nuclear production and energy production has not yet obviously landed on the ground, the "long Association's full coverage of coal for power generation and heating" is conducive to alleviating the loss degree of power enterprises. If the future power generation and heating industry is all long Association coal, it will play an important role in "supply protection". However, the follow-up measures for the signing of long-term association contracts by coal and power enterprises may still need to be further improved.

The above-mentioned authority also pointed out that recently, intensive regulation and control measures have been introduced at the national level to promote coal supply and price stability. At the same time, all provinces are required to resolutely do a good job in the work of double control of energy consumption, further strengthen the supply to power generation and heating enterprises, improve the structure of supply and demand, and adjust the irrational state of high coal prices.

With the further strengthening of the protection of coal supply for power generation and heating, it will effectively alleviate the excessive rise of coal prices to a certain extent, promote the return of coal prices to a reasonable range, and lay a good institutional foundation for ensuring coal supply and stabilizing prices this winter and next spring.

Market participants pointed out that although there is great pressure on coal supply, the NDRC has successively approved the resumption of production of open-pit coal mines and extended the joint trial operation time of some coal mines, and the Ministry of Commerce has also coordinated with Mongolia to expand imports and expand supply through various channels. in the medium and long term, with the resumption of open-pit coal production, the demand gap for thermal coal is expected to narrow.