(Yicai Global) Oct. 25 -- China’s top economic planning agency said it will investigate index compilers after receiving complaints about deliberate manipulation of coal prices.

In a statement today, the National Development and Reform Commission said it had been told that some index providers had failed to use authentic transaction prices, stoked speculation, abused the price inquiry and quotation system, and even issued fake price indexes, resulting in coal prices deviating sharply from the fundamentals of supply and demand.

The NDRC will summon the providers for talks and demand rectification. It will also take punitive measures such as suspension and blacklisting for those entities found to have violated the rules. The legal liabilities of the violators will also be investigated.

China’s coal prices have skyrocketed, partly because production in Shanxi province, a major coal-producing region, was badly affected by extreme weather. There have also been energy shortages, resulting in a further increase in coal demand. That has raised production costs for downstream sectors, as well as impacting winter heating.

The most-active contract for thermal coal futures traded on the Zhengzhou Commodity Exchange climbed to CNY1,982 (USD310) a ton on Oct. 19, up 164 percent from a record low of just CNY750.60 two months ago.

The NDRC said on Oct. 19 that coal prices were too high, adding that it would take steps against manipulation of prices and to stabilize the market. To maintain market order, regulators will also strengthen inspection and law enforcement to crack down on the release of fake information, price collusion and other violations.

Editor: Tom Litting