China issues coal buying mandate amid supply shortage, price gains

China’s central state planner issued a mandate to coal buyers to sign medium and long-term contracts to ensure stable supplies next year, against the backdrop of recent gains in coal prices.

According to National Development and Reform Commission (NDRC), coal miners should provide at least 80 per cent of output to medium and long-term contracts, which are encouraged to be signed before the end of the year. It also specified that the contracts, which range between three to five years, must cover 80 per cent of domestic coal consumption at power plants using imported coal and 75 per cent at power companies that only use domestic sources. Also, the amount of coal traded must reach at least 200,000 tonnes per contract for power generation, whereas coal used for metallurgical, construction materials, chemical and other industries must be at least 100,000 tonnes per contract.

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