Thermal coal prices at lowest this year

The price of 5,500 Kcal thermal coal at Qinhuangdao port, a major port in eastern China, reached 760 yuan ($120) on Friday, a record low this year, after it continued to fall over the past six weeks.

The price dropped 6 yuan compared with the last week and is 75 yuan lower than the same period last year.

The National Development and Reform Commission set a cap of 800 yuan on thermal coal prices at the beginning of this year, in order to ensure the supply for power generation in the winter.

Now, prices have dropped even lower than the price cap.

Industry insiders said thermal coal prices will continue to fall due to high stockpiles and less demand.

As an economic barometer, the reduction of both coal prices and the trading volume shows that China's economy is cooling down.

Xing Lei, a professor at the Institute of China Coal Economy of the Central University of Finance and Economy, said thermal coal consumption is reducing and coal inventories at coal-fired power plants are increasing, leading to a severe oversupply situation in the market.

Meanwhile, he said increasing imports of thermal coal also dragged down domestic prices.

According to China Coal Transportation & Sale Society, the country imported 25.05 million tons 11.87 million tons more than the same period last year, with a year-on-year growth rate of 90 percent.