China tightens coal price controls as country faces threat of summer power shortages

Thu, Jul 24 05:04 PM

BEIJING (AP) _ The government tightened price controls on coal Thursday in an effort to guarantee that power plants buy adequate supplies as China faces possible power shortages as the Beijing Olympics approach. The government will enforce prices of 840 to 860 yuan (US$123 to US$125) per ton at China's three main markets, said a statement by the country's planning agency, the National Development and Reform Commission.

High coal prices have prompted power plant operators to let stockpiles run low, raising the risk of power shortages during summer months when demand from hotels and home air conditioners is at its highest. Utilities have also been squeezed by government controls that bar them from passing on sharply higher prices for coal.

The government announced earlier price limits for coal on June 19 but the NDRC statement said suppliers were violating those. The NDRC's notice said market-level regulators have been ordered to scrutinize trading more closely and impose unspecified punishments on people who sell coal at higher prices than the limits.

China relies on coal to generate nearly 75 percent of its power. Low stockpiles last winter led to blackouts after severe storms disrupted supplies.

Beijing ordered mines to raise output and told utilities to increase stockpiles. But the country's power agency says some have only a few days' supply, well below the recommended minimum of 15 days.

The official Xinhua News Agency said last month that China's biggest utilities were ordered to ensure adequate power supplies for the Aug. 8-24 Beijing Olympics "regardless of cost.

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