CCP intervenes in coal prices, thermal coal futures prices fall below 1,000 yuan | Coal futures | Coal prices | Development and Reform Commission

[Epoch Times October 30, 2021](Epoch Times reporter Liu Yi comprehensive report) On October 29, the National Development and Reform Commission of the Communist Party of China issued a document to intervene in coal prices, and mainland coal futures fell again. Among them, the price of thermal coal per ton has fallen Thousands of yuan.

The National Development and Reform Commission of the Communist Party of China issued a document on its Weibo and WeChat public accounts on the 29th, saying: Recently, the National Development and Reform Commission has conducted an investigation on the coal production costs of all coal-producing provinces and key coal enterprises across the country. The preliminary summary results show that the cost of coal production is significantly lower than the current spot price of coal, and there is room for continued correction of coal prices.​​​

After the publication of the article, on the 29th, the mainland coal futures “three coal brothers” (thermal coal, coking coal, and coke) continued to fall. According to the “Hong Kong Economic Daily” news, as of 11:05 in the morning of the same day, the main contract of thermal coal futures of the Zhengzhou Commercial Exchange fell below the 1,000 yuan (renminbi, the same below) mark, falling to 967 yuan/ton.

According to Wall Street news on the 30th, as of the night of the 29th, thermal coal closed down 4.86%, coking coal closed down 4.56%, and coke closed down 2.30%. Among them, thermal coal closed at 970 yuan at night, down 51% from the historical high of 1982 yuan set last Tuesday (19th). During the day, thermal coal, coking coal, and coke closed down 8.64%, 10.18% and 7.93%, respectively.

From October 19th to 27th, the National Development and Reform Commission of the Communist Party of China included 28 articles directly related to coal on its official microblog, with an average of 3 articles per day. On the 27th, they intervened in the market from three aspects: rectifying illegal coal storage sites, studying measures to intervene in coal prices, and launching special supervision on spot market prices.

In the “National Development and Reform Commission Research on the Implementation of Intervention Measures on Coal Prices in accordance with the Law” published by the Development and Reform Commission of the Communist Party of China on the 19th, it stated that “The National Development and Reform Commission will make full use of all necessary means stipulated in the “Price Law” to study specific measures to intervene in coal prices. .”

Commentator Wen Xiaogang said that these series all show the CCP’s intervention in the market. The central government now uses the planned economy to control the market, setting prices much lower than the market, but it is useless if there are no commodities in the market. This is a common problem of dictatorships.

Professor Liu Junhai, director of the Institute of Commercial Law of Renmin University of China, told Times Finance that price intervention is not a permanent cure, and that restricting coal prices is unsustainable and the coal market should be liberalized. “If we intervene when the price of a certain product rises in the future, such as interfering with the price of vegetables when the price of vegetables rises, then the problem will be very serious.”

Editor in charge: Lin Congwen#

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