Capacity cuts to take heat off coal

A price adjustment scheme will help stabilize China's coal industry in 2017 as the authorities press ahead with capacity reduction, according to the chief of the industry's top national body.

"Coal capacity reduction needs to be done through both administrative and market means. The scheme is a result of negotiations among coal, steel and power industrial associations. It is a sound system that caters to the interests of producers and consumers in the market," said Jiang Zhimin, president of the China National Coal Association.

Last week, the National Development and Reform Commission released a notice on preventing severe coal price fluctuations in 2017, establishing specific benchmark prices for the mid-and long-term contracts between coal companies, power companies and steel smelters.