October 24, 2016 / 10:56 AM / in 3 years

China sets another meeting to boost coal supply as prices surge: sources

BEIJING (Reuters) - China’s state planner has called another last-minute meeting to discuss with more than 20 coal mines more steps to boost supplies to electric utilities and tame a rally in thermal coal prices, according to two sources and local press.

A driver gets off a loading vehicle at local businessman Sun Meng's small coal depot near a coal mine of the state-owned Longmay Group on the outskirts of Jixi, in Heilongjiang province, China, October 23, 2015. REUTERS/Jason Lee/File Photo

The National Development and Reform Commission (NDRC) has convened a meeting with 22 coal miners for Tuesday to discuss ways to guarantee supply during the winter while sticking to the government’s long-term goal of removing excess inefficient capacity, according to a document inviting companies to the meeting seen by Reuters.

The hastily-arranged meeting, the latest in a series of gatherings since early September, will discuss “how to reduce capacity, guarantee market supply as well as making sure the industry grows in a healthy way,” according to the document.

Local media reported earlier on Monday that the heads of some of China’s largest coal producers, including Shenhua Coal and ChinaCoal, were invited to the meeting.

The NDRC did not respond to requests for comment. 

The frequency of the meetings reflects growing concern about the spiraling cost of coal for utilities, which could lead to higher corporate and residential energy bills ahead of the winter, the highest electric demand period of the year.

Steps to boost output have done little so far to tame the wild price rally.

Coal futures on the Zhengzhou Commodity Exchange soared again today amid speculation about more cutbacks. The most-active January contract rose 3 percent to 614.8 yuan ($90.79) per ton, the highest since the launch of the contract in May last year.

Miner China Shenhua Energy Company rose 7.3 percent on Monday while China CoalEnergy Co jumped more than 10 percent to close at 6.57 yuan per share.

Earlier this month, the NDRC dismissed the months-long rally in coal prices as unsustainable, saying output from local mines would further replenish the country’s stockpiles.

($1 = 6.7715 Chinese yuan renminbi)

Reporting by Meng Meng and Josephine Mason; Editing by Christian Schmollinger

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