China planning body seeks to rein in surging thermal coal prices as key meeting

China is taking steps to rein in surging thermal coal prices in the domestic market and ensure smooth supply during the annual sessions of the National People's Congress in Beijing which started Tuesday. 

The National Development Reform Commission held a meeting Monday with major coal producers, rail operators as well as port authorities, market sources said Tuesday. 

At the meeting, the producers were asked to increase thermal coal supply. 

"Rail operators and port authorities were urged to coordinate on transport, while major domestic ports including, Qinhuangdao port, were instructed to increase stockpiles," a China-based market source said Tuesday. 

The Chinese domestic thermal coal market has been facing tight supply following two mining accidents -- one in Shaanxi province in January and one in Inner Mongolia in February. 

The Inner Mongolia accident took place on February 23 at a silver mine owned by Yinman Mine Company in the autonomous region. The mine, known to be the largest in China, also produces lead and zinc, local media reported. 

Inner Mongolia's authorities have ordered safety checks at all mines, including coal mines, in the autonomous region, according to the local government website. 

Meanwhile in Shaanxi, the provincial government ordered stringent checks across all coal mines during the first half of 2019 to improve safety standards. 

Many mines in Shaanxi province had still not fully resumed operations, sources said. 

These mine checks have disrupted domestic supply, pushing up prices in the local market, sources said. The price of domestic 5,500 kcal/kg NAR coal surged to Yuan 620/mt FOB Qinhuangdao Monday, up from Yuan 580/mt FOB at the start of 2019, according to S&P Global Platts data.