<p>After tasting first blood in iron ore, Chinese government has started to control coal market. The National Development and Reform Commission said that its recent investigation into all coal-producing provinces and key enterprises showed coal production costs are significantly lower than the current spot coal prices, and there is room to further adjustment to coal prices. As a result, market players feel that the coal prices will gradually return to a reasonable range with the help of a series of government measures, including boosting output and cracking down on price gouging and hoarding in the market.</p> <p>Ex-mine thermal coal of 5,500 kcal were heard traded at close to 1,000 yuan per tonne, after NDRC last week set an immediate target price at 1,200 yuan. The planner also called for power firms and miners to secure 100% coal supplies under term contracts, to stave off big price fluctuations</p> <p>Chinese National Development and Reform Commission officials inspected the Zhengzhou Commodity Exchange and cracked the whip on speculative bets in thermal coal futures. On its part, the exchange raised the trading limit on thermal coal contracts to 10 per cent and imposed limits on some members’ trading positions. Chinese officials also visited coal storage sites to crackdown on hoarding and unlicensed coal storage in key production regions and ports.</p> <p>Newcastle coal prices, a benchmark for the global market, dropped following a steep decline in the Chinese prices that witnessed their biggest weekly fall in five years last week following a government crackdown. Newcastle coal futures for November were quoted at USD 150 a tonne. Prices of coal that had hit a high of USD 270 a tonne on October 5 have now dropped by 42.5%.</p> <p>Coal for delivery next year in Europe also tumbled. Europe’s benchmark front-year contract has tumbled more than 50% since hitting an intraday peak of USD 193 per metric tonne in early October.</p>
<p>After tasting first blood in iron ore, Chinese government has started to control coal market. The National Development and Reform Commission said that its recent investigation into all coal-producing provinces and key enterprises showed coal production costs are significantly lower than the current spot coal prices, and there is room to further adjustment to coal prices. As a result, market players feel that the coal prices will gradually return to a reasonable range with the help of a series of government measures, including boosting output and cracking down on price gouging and hoarding in the market.</p> <p>Ex-mine thermal coal of 5,500 kcal were heard traded at close to 1,000 yuan per tonne, after NDRC last week set an immediate target price at 1,200 yuan. The planner also called for power firms and miners to secure 100% coal supplies under term contracts, to stave off big price fluctuations</p> <p>Chinese National Development and Reform Commission officials inspected the Zhengzhou Commodity Exchange and cracked the whip on speculative bets in thermal coal futures. On its part, the exchange raised the trading limit on thermal coal contracts to 10 per cent and imposed limits on some members’ trading positions. Chinese officials also visited coal storage sites to crackdown on hoarding and unlicensed coal storage in key production regions and ports.</p> <p>Newcastle coal prices, a benchmark for the global market, dropped following a steep decline in the Chinese prices that witnessed their biggest weekly fall in five years last week following a government crackdown. Newcastle coal futures for November were quoted at USD 150 a tonne. Prices of coal that had hit a high of USD 270 a tonne on October 5 have now dropped by 42.5%.</p> <p>Coal for delivery next year in Europe also tumbled. Europe’s benchmark front-year contract has tumbled more than 50% since hitting an intraday peak of USD 193 per metric tonne in early October.</p>
