China Economy

Chinese coal firms meet to address winter supply challenges

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Key Points
  • Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country's winter consumption peak approaches, an industry association said.
  • The association said rising market prices had put buyers under pressure, but suppliers were also facing "operating difficulties" as they try to fulfil contracted deliveries at a discount.
A man carts used coal bricks to a garbage bin in a village outside the Datai coal mine in Mentougou, west of Beijing.
Greg Baker | AFP | Getty Images

Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country's winter consumption peak approaches, an industry association said.

The China Coal Transportation and Distribution Association said in a notice late on Friday that the state-owned China Energy Investment Corp met with several other top producers to discuss ways to guarantee winter power supplies.

The association said rising market prices had put buyers under pressure, but suppliers were also facing "operating difficulties" as they try to fulfil contracted deliveries at a discount.

With coal demand set to surge as temperatures drop, China's state planning body said on Tuesday that it would send investigators to the regions to ensure that supply and price stabilization measures were implemented properly.

The firms agreed to proceed from the point of view of maintaining stability and would do their utmost to meet their "social responsibilities" over the winter, the association said.

As part of a series of measures aimed at securing winter supplies, the National Development and Reform Commission is also allowing mines to increase their production capacity.

To make sure coal is delivered to regions that need it the most, producers and purchasers from China's coal-dependent northeastern regions gathered in Beijing on Saturday to lock in supply contracts for the winter, state news agency Xinhua reported.

At a signing ceremony, medium- and long-term supply contracts were offered exclusively to power and heating providers in the northeast, where temperatures often drop to minus 20 degrees Celsius (minus 4 Fahrenheit).