Chinese coal groups vow to stabilize rising prices amid peak season
Published: Jan 03, 2021 02:08 PM

Photo taken on Dec. 22, 2020 shows a thermal coal yard of Huanghua Port in Cangzhou City, north China's Hebei Province. Huanghua Port, one of the key ports for thermal coal transportation in China, has stepped up its turnover rate since this December. A daily average of 500,000 tonnes of thermal coal is loaded to ships at the port now to quench the thirst for coal-fired power generation in southern parts of the country. (Xinhua/Wang Min)

Seven coal industry groups made a joint announcement on Sunday promising to stabilize coal market and try to control turbulent coal prices to ensure production safety and steady power supply, as coal prices continue to surge caused by rising winter demand, industry association reported.

The high demand for energy in China's rapidly growing industrial sector, along with several cold snaps at the end of 2020, have led to higher coal prices in China and even power outages in some regions.

Due to the intense supply of coal for power generators in December, governments of some provinces in Central, South and East China, including Hunan, Zhejiang and Guangdong provinces, introduced power rationing for local factories to ensure residential supply. However, the National Development and Reform Commission (NDRC) said that China's power supply remained orderly.

The joint statement from the seven Chinese leading coal groups was in line with the NDRC's order that they must play important roles in stabilizing the coal market to ensure the stable supply of coal and to meet the high demands during the New Year's Day holiday and upcoming Spring Festival in February.

The seven groups involved are China Energy Investment Corporation (China Energy), China National Coal Group Corporation (China Coal Group), Jinneng Holding Group, Shandong Energy Group Co, Shaanxi Coal and Chemical Industry Group Co, Shanxi Coking Coal Group Co and Inter Mongolia Yitai Group Co, according to a news release of China Coal Transportation and Distribution Association on Sunday.

In the announcement, the groups vowed to take actions in five areas, including maintaining coal supply with the premise of ensuring safety. Coal production firms should arrange working shifts during the holidays and conduct more security checks, the announcement said.

Also, the quality of coal products must meet standard requirements and will be prioritized for the power plants in specific areas facing coal shortages.

The announcement also suggested accelerating the signing and summarizing of middle- and long- term contracts in 2021 to iron out price volatilities. The cooperation between coal production and distribution firms needs to be optimized. 

The announcement stated that backup plans should be in place in case of emergency situations to ensure the normal operation of all industrial sectors.