BEIJING -China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while coal prices have also stabilised, the state planner said.
The most-traded January thermal coal futures contract on the Zhengzhou Commodity Exchange fell 9.26% to 925.2 yuan ($144.48) per tonne early on Monday.
A slew of cooling measures announced by China has led the futures prices plunging more than 53% since its high of 1,982 yuan on Oct 19.
The government has since July approved capacity expansions at hundreds of coal mines across the country amid a widespread power shortage partly due to insufficient supply, and has rolled out a raft of measures to tame runaway coal prices which soared nearly 190% this year.
“Average daily coal production has reached more than 11.5 million tonnes for a few consecutive days since mid-October, hitting as high as 11.72 million tonnes,” said the National Development and Reform Commission (NDRC) in a statement issued on Sunday night.
Reuters calculations show that China’s new coal output rate puts it on pace to produce more of the fuel this year than ever before if the increase is sustained.
Meanwhile, daily coal supply to the key coal-fired power plants has topped to 8.32 million tonnes, the highest ever level in history.
That helps drive up total coal inventory at Chinese power plants to 106 million tonnes, up more than 28 million tonnes from end-September, and these could support 19 days of consumption, the NDRC said.
The NDRC estimated coal stocks at power plants to exceed 110 million tonnes within three days.
Spot prices for thermal coal with an energy content of 5,500 kilocalories have dropped to below 1,200 yuan a tonne at mines and to less than 1,500 yuan a tonne at ports, while most-traded thermal coal futures contract plunged 51% in the last eight trading days, the state planner said.
Separately on Sunday, the NDRC said it has set up an online platform monitoring the implementation of long-term coal contracts signed between coal miners and downstream users, and the system will officially launch in early November.
China has repeatedly urged coal companies to strictly perform their contractual obligations at an aim to steady coal prices.
($1 = 6.4038 Chinese yuan renminbi)