NDRC looks to shake up coal pricing

People's Daily
Wang Jiamei (Global Times)

With an ultimate goal of scrapping annual contracts altogether, the NDRC intends to encourage coal suppliers and power plants to ink medium- or long-term contracts with durations of three to five years during the annual thermal coal contract meetings which are likely to be held in mid- or late December of this year, according to the report. The new policy described by local media would mark the first time in nearly two decades that the country's coal supply has been completely exposed to market forces. 

In another major development for the coal industry, the NDRC is also expected to stop issuing framework plans to allocate railway capacity for thermal coal transportation. Buyers and sellers would instead have to bring their long-term contracts to local railway departments to secure the freight capacity they need.

China eyes scrapping annual term coal contracts - sources

Reuters
Fayen Wong

China's top economic planning agency has submitted a plan to scrap an annual coal contract system requiring suppliers to sell certain quantities to power companies at preferential prices, industry sources said on Tuesday.

The move heralds a big step towards liberalisation of the thermal coal market in China, the world's biggest buyer of the fuel, and could trigger an increase in imports since domestic prices would no longer be kept artificially low.

China may scrap coal contracts; open up way for further imports

Australia Mining
Cole Latimer

The National Development Reform Commission's (NRD) plan is just the latest in the ongoing liberalisation of China's coal market, and may precipitate an jump in imports as domestic prices will no longer be forced to remain low, according to Reuters.