NDRC to Deploy Price Formation Mechanism in Coal Market

SHANGHAI, Apr 27 (SMM) - On February 24, the National Development and Reform Commission of China issued the Notice on Further Perfecting the Price Formation Mechanism in Coal Market (No.303 [2022]), which defined the reasonable range of the medium and long-term transaction price of coal (thermal coal, the same below). Among them, the reasonable price range of coal (5,500 kcal) transported by ship at Qinhuangdao Port is 570-770 yuan/mt, the reasonable price range of coal mining in Shanxi, Shaanxi and west Inner Mongolia (5,500 kcal) is 370-570 yuan/mt, 320-520 yuan/mt and 260-460 yuan/mt respectively, and the reasonable price range of coal mining in eastern Inner Mongolia (3,500 kcal) is 200-300 yuan/mt. The Notice will be implemented from May 1, 2022.

Recently, NDRC made a special deployment, requiring the relevant provinces to guide and urge enterprises to strictly implement the requirements of coal medium and long-term contracts, and to take practical measures to ensure that the reasonable price range of medium and long-term coal transactions runs successfully. Development and reform departments at all levels will monitor the prices of coal production and circulation. When the departments found that the price exceeds the reasonable range, they will immediately remind, interview, investigate or notice, etc. to guide the coal price to return to the reasonable range. At the same time, the development and reform departments at all levels should cooperate with the market supervision department, and promptly investigate and deal with illegal behaviours such as spreading price increase information, driving up prices, etc.

NDRC, in the next step, will closely monitor the coal market and prices operation, strengthen the regulation and supervision of the prices, and comprehensively use market-oriented and rule-of-law to guide the coal prices to run in a reasonable range to ensure the safe and stable supply of energy.