Coal prices fall 59% from peak but fall short of China's expectations

Coal in the futures contract on the Zhengzhou exchange on November 29 at 821.2 yuan/ton.

China's coal shortage crisis is resolved because both production and coal reserves have increased to ensure this year's cold winter.

Last week, China's National Development and Reform Commission said coal reserves at power plants were 147 million tons and could reach a record high by the end of November. Besides, current output is 12. million tons/day while consuming about 10 million tons/day. China's coal imports have also been high in recent months. In November, the country bought 22.64 million tons, 900,000 tons higher than October and nearly double the same period last year.

However, the price of this item is still high. Specifically, coal in the futures contract on the Zhengzhou exchange on November 29 was at 821.2 yuan/ton.

However, this fuel price has decreased by 59% compared to the record of 1,982 yuan/ton recorded on October 19, but still higher than the Chinese government's expectation of 550-600 yuan/ton. Last winter, the highest coal price was just over 600 yuan/ton.

According to Reuters, if production continues to be maintained and Chinese authorities still intervene in the market, coal prices will go lower.

NDH