Ningxia Thermal Power Firms’ Letter Requesting Lower Coal Prices Fails

Yicai

2017-03-28

(Yicai Global) March 28 -- The Commission of Economy and Information Technology of Ningxia Autonomous Region has been hands-off after seven thermal power companies in Ningxia jointly requested that it work to cut coal prices that the firms said are too high and causing losses, Securities Daily reported today.

The commission does not want to intervene because the current price of RMB320 per ton for Ningxia 4500 kcal thermal coal that has been converted into 5500 kcal thermal coal does not exceed the long-term price of RMB535 a ton that coal enterprises previously agreed to.

Seven companies including the four major central thermal power enterprises in Ningxia submitted a petition letter to the commission on March 17. They requested assistance with their current operational difficulties.

Shenhua Ningxia Coal Industry Group’s coal mine contract price has increased to RMB320 per ton from RMB200 a ton at the beginning of 2016, up more than 60 percent, the group said. The seven power companies requested that prices be maintained at RMB260 per ton.

Since coal is still in short supply, coal groups have adopted a though attitude towards thermal power producers.

Shenhua Ningxia Coal Industry Group said that this year, it has organized production in strict accordance with the state’s production capacity requirements and its coal to oil project has been put into operation, leading to shift in coal resource supply and demand. The group has done everything possible to improve its contract fulfillment rate and intends to maintain first quarter prices in the second quarter.

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