[Ferro-Alloys.com] The Australian reported that China is fast becoming a price setter for thermal coal after overtaking Japan as the world's biggest importer of coal last year.

 

So a change in how China prices the black rocks is set to create waves in countries such as Australia and Indonesia, which together supplied more than half of its 150 million tonnes of coal imports in the first eight months of the year.  China expects thermal coal prices to fall further from near three year lows around USD 90 a tonne.

 

Despite big strides in expanding renewable output through building wind farms and solar projects, thermal coal still provides more than two-thirds of China's power needs. That helps explain why China has taken a slower approach to reforming coal prices than other energy, notably petrol for cars run by the country's rapidly expanding middle class. China's leaders have long maintained a regime of requiring coalminers and electricity generators to agree volumes at prices fixed below the market rate. Just last year, the government ordered miners to refrain from asking for higher prices in a bid to curb inflation.

 

Now, local media say China's cabinet is considering a proposal from the National Development and Reform Commission, or NDRC, that will allow state-owned miners more freedom to negotiate coal supply and prices with power generators such as Huaneng Group and China Resources Power.