CHINA’S thermal coal futures fell as much as 7.5 percent Thursday after the State planner warned companies against inflating coal prices and reiterated it would ensure enough supply to stabilize markets.

The most-active thermal coal futures on the Zhengzhou Commodity Exchange were down 3.5 percent at 836.2 yuan (US$131.53) a ton in morning trading, after falling as much as 7.5 percent at one point.

But the contract is still up 24 percent this year, less than half the life-time high touched during the power crunch in October last year.

The most-traded coking coal futures on the Dalian Commodity Exchange dropped 5.4 percent.

The National Development and Reform Commission (NDRC) summoned some coal producers Wednesday, urging them to resume supply as soon as possible, and asked local authorities to strengthen supervision and keep coal prices within a reasonable range.

The warning was the latest in a series of moves to avoid another supply crunch like what hit late last year, leading to widespread power rationing and record coal prices.

“The NDRC’s move is to cool the future price,” Wood Mackenzie senior consultant Yu Zhai said Thursday, adding “we expect the government to encourage mines to resume operation after the Lunar New Year holidays to increase domestic output to stabilize the Qinhuangdao [spot] price soon.”

The Qinhuangdao thermal coal price was 1,010 yuan per ton Wednesday, up more than 26 percent this year, according to Shanghai Steelhome Information Technology.

Total coal inventory at major Chinese ports was at 46.88 million tons, the lowest in a year, before the holidays started Jan. 31, according to data compiled by the China Coal Transportation and Distribution Association.

Coal production by central State-owned firms exceeded 1 billion tons in 2021, a record high, the State Assets Supervision and Administration Commission said. (SD-Agencies)