China to investigate energy index providers in an attempt to bring coal prices under control


  • China thermal coal prices drop 7%
  • NDRC says it will survey coal and energy index providers
  • NDRC urges coal companies to strictly adhere to their contractual obligations

BEIJING, Oct. 25 (Reuters) – China on Monday said it would investigate suppliers of energy price indexes as it urged coal industry players to “strictly” adhere to their contractual obligations, in its latest attempt to control prices which have reached record highs.

The most active thermal coal futures contract on the Zhengzhou Commodity Exchange, for delivery in January, fell more than 8% – their fourth consecutive daily decline – but recovered some losses to close 7% at 1,305, 6 yuan ($ 204.51) per ton.

The contract was down more than 34% from Tuesday’s record 1,982 yuan. Thermal coal futures have risen more than 150% this year.

The state planner, the National Development and Reform Commission (NDRC), said it will investigate complaints that some energy information providers, including in the coal sector, have used bogus transaction prices, published “hearsay” information and “fabricated” price data, and “manipulated price indices”.

“As a result, the price of coal has completely deviated from the fundamentals of supply and demand, seriously damaging national and public interests,” he said.

The NDRC said it would verify compliance and summon index providers, and sanction any irregularities with measures such as suspension of publication or blacklisting. Read more

He did not name any of the information providers.

Dozens of organizations provide data on coal prices in China, including the China Electricity Council and the China Coal Transportation and Distribution Association. Local consulting firms such as Fenwei Digital Information Technology and Yimei, a trading platform owned by Helue E-Commerce Corp, also publish coal prices.

Fenwei and the China Coal Transportation and Distribution Association made no comment, while Yimei was off-limits and the China Electricity Council said it was after hours.

In September, authorities banned a coal trading company from publishing daily prices and market information as part of efforts to regulate commodity markets and contain scorching prices. Read more

NEW RULES

In recent months, Beijing has released new rules for commodity price indexes and said regulators will suspend the activities of those who fail to comply. Read more

The NDRC also urged coal companies to strictly adhere to their contractual obligations and called on them to strengthen credit supervision of medium and long-term contracts.

The NDRC said it would urge upstream and downstream coal companies to sign medium and long term contracts for electricity and coal and “give full play to medium and long term coal contracts to stabilize the market. Marlet”. Read more

On Monday, the China Coal Industry Association urged member companies to increase production while ensuring mining security, secure supplies during the winter, promote “rational” coal prices, execute medium and long contracts. term and sign 2022 contracts in advance. .

Climate activists are hopeful that China, the world’s largest coal miner and consumer and the largest emitter of greenhouse gases, can be persuaded to start cutting coal consumption earlier than its 2026 target, but severe energy shortages have put pressure on the government to speed up fuel manufacturing. Read more

China is pushing miners to ramp up production and boost imports so power plants can replenish stocks for the winter, but analysts say the shortages are expected to persist for at least a few months. Read more

The NDRC has taken a series of measures and said it is exploring ways to bring prices to a “reasonable range” and crack down on “excessive profits” by coal companies. Read more

China’s securities regulator last week asked futures exchanges to raise fees, restrict trading quotas and crack down on speculation.

($ 1 = 6.3841 yuan renminbi)

Reporting by Shivani Singh, Min Zhang and Judy Hua; Editing by Christian Schmollinger and David Holmes

Our Standards: The Thomson Reuters Trust Principles.

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