An official from China's coal industry association has disclosed that the power coal price negotiation for 2009 "has been put in the charge of government departments."
The country's National Development and Reform Commission had earlier convened power and coal enterprises to discuss the issue but has not made any comment on the report.
Several officials from power enterprises have revealed that the NDRC proposed a 4% compromise increase, something the coal enterprises have all denied.
Coal enterprises first recognized that the government may have to intervene in the negotiations on Monday, but the industry association refused to predict the price adjustment, saying "the coal price should be determined by the market."
An official close to the power enterprises said "Power enterprises seldom expect a price rise of less than 4% and believe the adjustment rests with the government. But both sides have reacted indifferently towards the intervention on the concern of self interests.”
Analysts note that the government may hammer out an omnibus scheme including electricity price adjustment, power coal pricing, coal power connection and resource tax.
Despite declining prices for coking coal, power prices remain on an upward trend. By April 20th the coal price at Qinhuangdao Port, a benchmark in China, had increased to CNY600 - 620 per tonne for 6,000 kilocalories per kilogram Datong high quality mixed coal, a rise of CNY 10 per tonne over a week.
Source: Shanghai Securities News/Steel Guru
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