Development and Reform Commission stabilizes the price of coal in the hardware industry

The National Development and Reform Commission officially issued the "Guidelines for National Coal Production, Transportation, and Demand Coordination in 2011 (hereinafter referred to as the "Guiding Opinions"). This is the National Development and Reform Commission formally stipulating the price of key coal contracts for next year in the form of documents. This was consistent with the content of the previous inspection team of the State Council in Shanxi Province when it spoke to coal enterprises: To maintain the stability of coal prices, prices are not raised on a 2010 basis.

Different from the "Guiding Opinions" issued last year, as of the time of the press release, the National Development and Reform Commission has not publicized the content of the guidelines on the website. According to sources, the National Development and Reform Commission issued a total of about a few hundred copies in the form of paper documents.

According to reports, according to the "Guiding Opinions," the company will continue to play its role as the main body and maintain coal price stability. In recent days, the National Development and Reform Commission has issued a document on five occasions requesting coal companies to self-regulate their prices and stabilize coal prices, especially for coal. Prior to this, when the inspection team of the State Council conducted price supervision in Shanxi Province, it had “greet” the coal enterprises in the province and demanded all key coal companies. The coal price of the key contracts in 2011 cannot exceed the previous year.

On December 15, 2009, the National Development and Reform Commission formally issued the "Guiding Opinions on Perfecting the Cohesion of Coal Production, Transportation, and Demand", and all canceled the 2010 coal video conference, convergence meeting, and contract summary meeting. After 2010, coal and power companies will completely negotiate coal prices independently, and government agencies and industry organizations must not specify the linking mode of enterprises and must not force companies to converge. This marks the end of the national coal ordering conference that began in 1993. Completely withdrawn from the coal-fired negotiations, China's coal production and transportation need to fully enter the market-based autonomous trading state.

For related government departments to intervene in coal prices, Xing Lei, director of the China Coal Listed Company Research Center of China Coal Economic Research Institute of Central University of Finance and Economics believes that this is only a very temporary measure taken under special circumstances.

Analysts believe that under the current situation of high prices, the increase in electricity prices will inevitably aggravate pressure on prices in China and even next year. To this end, the National Development and Reform Commission tried to control the increase in coal prices so as to achieve the purpose of not adjusting the electricity price, thereby ensuring the stable operation of the entire national economy.

According to reports of the resale contract coal quota, the amount of coal to be included in the framework of the inter-provincial coal railway power allocation intention in 2011 will exceed 900 million tons.

One electric power industry analyst, the key contract coal is the type left under the planned economic system. At present, its share has become less and less, accounting for about 40% of the total power companies. In the interview, some electric power companies were worried that coal companies would further reduce this part of the coal volume, while worrying about the contractual cashing rate and coal quality problems that have occurred over the years.

The author learned from many parties that the phenomenon of “middle business” that was born last year due to the signing of a delay in the price stalemate between the two sides has not faded. Due to the dual-track system of coal prices, people who already have a “iron” relationship with large coal companies have started to resell their contract coal allowances, so that they can get the railway transportation capacity.

At the same time, the relevant person in charge of the China Coal Marketing Association revealed that although the documents have been issued for three days, they have not yet signed a single one. A coal industry official told the author that this is normal and has just been issued for 3 days and is still in the stage of learning and understanding. Both parties are still in close connection.

The relevant person in charge of China Coal Energy stated: “The National Development and Reform Commission requires that coal prices are not raised, and as a coal company, it will surely be implemented strictly.” He believes that under current circumstances, there is no atmosphere for price increases.

According to the person in charge of Shanxi Coking Coal, after 2007, coal coking coal exports from Shanxi were basically eliminated, mainly used to ensure domestic supply, which to a certain extent ensured a stable supply of the coal market.

Despite the government's explicit pricing guidance, many power generation companies are worried that coal companies will drastically reduce the number of key coal-fired coal contracts and increase the volume of coal traded in the market to meet the government's convergence policy. In addition, whether the cash rate of key contract coals can be implemented in place still requires further observation.

Relevant sources disclosed that although this year did not point out in the document that the on-site contract will be held, it may still be led by the China Coal Transportation and Marketing Association and Northeast Asia Coal Trading Center. It may be held in Dalian in late December on-site contract summary meeting.