Steel News Roundup (Oct 25)

SHANGHAI, Oct 25 (SMM) - This is a roundup of news in the steel industry for last week.

China is take various measures to curb the price increase of coal.

The National Development and Reform Commission stated that it was studying the legitimate regulation measures to bring the coal prices back to a reasonable range

Recently, the coal prices have risen rapidly, hitting record highs in succession, greatly pushing up production costs in downstream industries, and adversely affecting power supply and winter heating. In response to the above situation, and in order to do a good job in ensuring supply and price stabilisation in the coal market, on the afternoon of October 19, the National Development and Reform Commission convened key leading companies, the China Coal Industry Association, and the China Electricity Council to hold panel discussions as of how to ensure the energy supply in the upcoming winter and spring by regulating coal prices in accordance with the laws and regulations. The National Development and Reform Commission will make full use of all necessary means stipulated in the Price Law to study specific measures to regulate coal prices, to bring the prices as well as the market back to rationality, to ensure safe and stable supply of energy, and to guarantee a warm winter for the people.

The National Development and Reform Commission held a special meeting to study policies and measures to stop coal companies from making exorbitant profits

On the morning of October 22, the Pricing Department of the National Development and Reform Commission convened a meeting of the China Coal Industry Association and some key coal companies to study specific policies and measures to stop coal companies from making exorbitant profits and ensure long-term stability of coal prices. The meeting attendees listened to the reports from the China Coal Industry Association and some key coal companies on the current industry production and operation status as well as other information, including the output, prices, costs, profits, etc., discussed reasonable prices and profit levels in the industry, and studied how to prevent the exorbitant profits by coal companies and ensure the price stability. The meeting emphasised that the coal companies must operate in accordance with the laws and regulations, and set the prices reasonably. For actions that violate the current regulations on prohibiting profiteering, severe penalties will be imposed in accordance with the law.

The National Development and Reform Commission organized investigations and prosecutions of the release of coal-related rumours

On October 21, a social media account was detected with spreading false information that some coal mines in Yulin City, Shaanxi Province had ceased production and sales, and a few coal mines would continue to raise the prices. After discovering the above information, the National Development and Reform Commission immediately instructed the relevant departments of Shaanxi Province to organize investigations and verifications, and to strictly deal with them in accordance with laws and regulations. The relevant departments of Yulin City verified the above-mentioned information with the relevant coal mines one by one, which was proved to be false. At present, the National Development and Reform Commission has instructed the relevant local government departments to immediately investigate into the social media account holders, and will punish them accordingly.

The Development and Reform Commission: To continue to strengthen the joint supervision of the spot market to curb excessive speculation

Jiang Yi, deputy director of the Department of Economic Restructuring of the National Development and Reform Commission, stated on October 21 that since the beginning of this year, due to various international and domestic factors, the prices of commodities have risen significantly, which has brought certain operating pressures to downstream industries, especially small and medium-sized enterprises. The Party Central Committee and the State Council attach great importance to the adverse effects of rising commodity prices. The National Development and Reform Commission will implement various actions in conjunction with relevant departments to increase the production and supply, to launch government reserves, to regulate the import and export market, to enhance market supervision, and to rationalise market expectation, etc. to ensure the supply and price stability of commodities. It is important to continue to strengthen the joint supervision of the futures and spot market, to interview key enterprises and associations in some industries, and to conduct joint investigations in relevant trading centres and key enterprises, to urge enterprises to operate in compliance with laws and regulations, and to crack down on illegal activities such as blind price speculations and hoarding in accordance with the law. Regarding the electricity prices, the international energy prices have continued to rise recently, and domestic coal prices have also risen significantly. The Department has carried out immediate reform measures to promote the marketization of electricity prices. The one-sided fluctuation range of coal-fired electricity market transaction prices will expand from the previous limit of 10% upwards and 15% downwards to 20% in principle, while the energy-intensive enterprises will not be subject to the limit of 20% upwards.

National Bureau of Mine Safety Supervision: To promote the safety of coal mines in the upcoming winter and spring, and to avoid "one size fits all”actions

On October 20th, the National Mine Safety Supervision Bureau held a press conference. Jing Jian, deputy director of the Safety Fundamental Department of the National Mine Safety Supervision Bureau, introduced that under the premise of ensuring safety, four specific tasks have been done. First, speed up the release of high-quality coal mines’ production capacity. Second, actively coordinate and solve the problem of lacking coal mine licenses. Third, increase the political support of nuclear capacity. Fourth, strengthen service guidance. For coal mines that have stopped production for rectification due to accidents or major hidden dangers, they shall strictly follow the requirements with clear guidance by designated personnel on effective rectification and production resumption, and the “one size fits all” actions shall be strictly forbidden.

The State-owned Assets Supervision and Administration Commission: Coal enterprises should optimize production capacity layout and promote coal mines to release production capacity as soon as possible if possible

On October 18, the State-owned Assets Supervision and Administration Commission held a meeting to ensure the energy and power supply this winter and next spring. The meeting emphasized that coal companies should optimize the layout of production capacity and release production capacity as soon as possible. The approved open-pit coal mines should speed up the production and reach optimal production capacity, and actively ensure the demand for power generation and heating and the use of coal by the people. The power generation and heating companies should make every effort to ensure the supply of coal-fired power, hydropower and nuclear power. The power grid companies must strengthen large-scale resource allocation to improve the level of power grid intelligence. The petroleum and petrochemicals companies should increase production and reserves, and continuously improve their capability to ensure supply.