(Yicai Global) July 16 -- China is to release a further 10 million tons of coal from its reserves into the market in the fifth such release this year to stem surging coal prices that have gained 30 percent this year already and to prevent shortages as demand for power leaps during the hot summer months.

The coal will be made available from dozens of coal storage bases and ports nationwide and will be put on the market as needed, Xinhua News Agency reported yesterday, citing an official from the National Development and Reform Commission. The previous four releases were five million tons each.

The news brought the price of the main trading contract for coal futures down 1.9 percent to CNY873 (USD135) per ton on the Zhengzhou Commodity Exchange yesterday, ending a four-day surge. But it was trading back up at 1.1 percent at CNY888.80 per ton as of midday today.

The country, which has around 40 million tons of coal in storage at present, is in the process of forming coal reserves of 600 million tons, around 15 percent of annual coal consumption, to stabilize prices and guarantee supply during key times, the official said. Of this, 200 million can be directly dispatched by the central and local governments, and the other 400 million tons are part of corporate inventories.

China produced 1.9 billion tons of raw coal in the first half, a 6.4 percent jump from the same period last year, according to the National Bureau of Statistics and General Administration of Customs. Coal imports fell 19.7 percent to 140 million tons.

Editors: Tang Shihua, Kim Taylor