The National Development and Reform Commission (NDRC) has launched an investigation on the coal futures market after certain types of thermal coal futures registered an abnormal price fluctuation, according to a statement by China’s top economic planner on Wednesday.
The NDRC said it has carefully sifted through trading bodies that are suspected of malicious speculation and has asked relevant government departments to summon them.
The prices of futures of thermal coal fluctuated intensely in recent months. For example, the thermal coal future saw its price plunge by 4.58 percent on February 9, while slipping another 5.4 percent on February 15.
According to the NDRC, it has uncovered multiple problems with the pricing of thermal coal futures. For example, certain coal varieties traded on the futures market have never been spot traded in ports. Also, some indexed institutions have never verified the actual trading condition and transaction price.
The regulators asked coal futures traders to ramp up the rectification of their businesses and standardize the price index to ensure that the prices do not mislead market expectations, the NDRC noted.
The NDRC will continue to strengthen monitoring risks in the market to put down market speculation. It also vowed to seriously punish unlawful practices in the thermal coal futures market in line with relevant laws and regulations.
In particular, the regulators will summon, hold accountable and publicly expose those that violate the rules to maintain order in the market, the statement said.
View of piles of coal on a quay in Rizhao, East China’s Shandong Province Photo: cnsphoto
