Coal futures in China tumbles after recording multi-year highs

Highlights

  • Thermal coal futures in China tumbled for the consecutive third evening session on Thursday.
  • China is pushing coal miners to increase their production and imports simultaneously.
  • Coke futures and coking coal on the Dalian Commodity Exchange were both trading nearly 6% lower on Thursday evening.

Thermal coal futures in China tumbled for the consecutive third evening session on Thursday after the government have given signals that it may intervene to cool the skyrocketing prices and ease the global power crunch.

The country is pushing coal miners to increase their production and imports simultaneously so that power plants in the country can regain their stocks before the arrival of winters.

The National Development and Reform Commission (NDRC) stated on Tuesday that it has been analyzing ways of intervening to cool down the skyrocketing coal prices and it has also promised to take all necessary steps to bring the prices in a reasonable range.

China’s coal futures tumbled

The most active thermal coal futures contract tumbled the maximum of 14% to CNY1,365 per tonne on the Zhengzhou Commodity Exchange on Thursday.

At the same time, coke futures and coking coal on the Dalian Commodity Exchange were both trading nearly 6% lower on Thursday evening.

Coal fed power plants

Coal fed power plants | Source: © Sofiaworld | Megapixl.com

A coal shortage in the country has halted electricity generation in the country and spurred electricity rationing in many parts of the country.

China is one of the biggest consumers and producers of coal in the world that has increased its output to fulfill the burgeoning energy demand.

The country’s top coal miner, China Energy Group stated on Thursday that it is going to ramp up its output by about 2.26Mt from 1 October to 20 October.

Bottom Line

Thermal coal futures in China tumbled on Thursday after the government has given signals to intervene to cool down skyrocketing coal prices.

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