Jakarta, CNBC Indonesia – Several Chinese coal companies are ready to increase production so that prices do not go wild due to the very limited supply in the world.
As is known, China’s thermal coal prices have jumped more than 200% this year to record highs. This was due to supply disruptions from a number of mines due to mining safety inspections, anti-corruption investigations, and flooding in key mining areas.
China Energy Group and Shanxi Jinneng Holding Group (SJAMG.UL), China’s No.1 and No.8 coal miner, said they would raise output and steer prices back into a reasonable range.
They have promised to keep the spot price of thermal coal with an energy content of 5,500 kilocalories shipped to Bohai Bay in northern China below 1,800 yuan ($ 282) per ton, and prices for 5,000 kilocalories and 4,500 kilocalories of coal 1,500 yuan and 1,200 yuan respectively .
The price of other thermal coal with a higher calorific value will not exceed 2,000 yuan per tonne.
Several other state-backed coal miners in China’s main coal mining regions of Shanxi and Inner Mongolia have also launched similar price cap plans.
Chinese Deputy Prime Minister Han Zheng has insisted he will strictly regulate coal price speculation.
The state asset watchdog also urged state-backed companies to prioritize coal supply and asked power plants to build supplies of raw materials “regardless of cost”.
On October 18, China’s daily coal production stood at 11.6 million tons, an increase of around 11.2 million tons compared to the previous month.
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