(Yicai Global) Sept. 29 -- Chinese coal giant China Shenhua Energy Co.[HK:1088] has decided to reduce its coal prices by USD1.5 (CNY10) per ton in the northern port market to curb a steep rise in coal prices and balance supply and demand.
Tight coal stocks have sent prices up since early September, with the spot price of USD92.87 per ton now up to USD109.35 a ton. Shipping costs from northern ports to the south are about twice as much as in previous years, data on coal portal cqcoal.com show.
The government will stiffen coal production safety supervision next month and this raises further market expectations of a supply shortfall, leading to further price escalations, while the coal shortage has deranged cargo and shipping harmony, thus also pushing up shipping prices.
To dampen swift price hikes, China Shenhua has decided to implement suppression measures effective from Sept. 28, while issues of port-capacity backlogs are prompting transport officials to formulate measures to macro-coordinate these to safeguard smooth and orderly cargo shipments.