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China agrees on plan to cap coal price to ease power crisis

Bloomberg
Bloomberg10/27/2021 07:00 PM GMT+08  • 3 min read
China agrees on plan to cap coal price to ease power crisis
The plan, which is scheduled to last until May 1 next year, is pending approval by the State Council
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China plans to limit the price miners sell thermal coal for as it seeks to ease a power crunch that’s prompted electricity rationing and even caused a blackout in a major city last month.

Beijing aims to set the price of its most-popular 5,500-NAR grade coal at 440 yuan (US$69 / $92.9) a ton at the pithead, according to people familiar with the situation, who asked not to be identified as they aren’t authorized to speak publicly. That price, which includes taxes, is a target rate, and there will be an absolute ceiling at 528 yuan, the people said.

The plan, which is scheduled to last until May 1 next year, is pending approval by the State Council, and could be revised, according to the people. Beijing also wants downstream sales prices to be controlled, though it will let local governments set standards to limit the price of local coal trading, the people said. Coal importers will obtain subsidies to balance their losses, they said.

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