China Cracks Down on Speculation over Surge in Coal Prices
China is looking to put soaring coal prices under control by starting an investigation into the market and coal prices to prevent speculation and hoarding of supply. Chinese state planner National Development and Reform Commission and the state market regulator have announced a probe into the coal prices. The Chinese authorities will check abnormal trading and speculation, as well as crack down on hoarding and driving up prices
Coal prices in China have surged in recent weeks as thermal coal power plants are hoarding supply ahead of the expected peak in summer demand. The surging price of coal is affecting the downstream sector and the real economy. Physical prices for coal of the 5,500 kilocalorie/kilogram grade hit a record high in May and have been sitting there since.
China’s coal market has been distorted since the Chinese authorities banned coal imports from Australia as part of the dispute between the two countries, which has affected coal supply into China. Australia used to be China’s second-largest thermal coal supplier before the geopolitical rift at the end of last year.