China Stops Coal Price Reporting to Crack Down on Rally

Two major Chinese coal data providers halted their price indexes after Beijing intensified a campaign to tame down rallies in the mainstay fuel and iron ore to rein in inflation. 

Fenwei Energy information Services Co., stopped publishing its indexes for various thermal coal grades, including the most widely tracked benchmark for the fuel. The firm will resume reporting when trading returns to normal, it said in a statement. Another independent data provider Yimei also paused price reporting until further notice.

Fenwei stopped providing spot and intra-month trade data from late Tuesday, citing difficulties in tracking spot transactions in China’s key Bohai Bay area. The suspension is meant to “avoid misleading market players,” in the absence of reliable trading data, it said. 

Physical trades in major northern ports have been constrained after Beijing warned it will punish hoarders and price manipulators. The National Development and Reform Commission, China’s top planning agency, asked major coal miners to reduce prices last week, a day after futures surged to the highest level in more than two months. 

China has renewed its campaign to prevent raw materials prices from overheating while it takes steps to stimulate a faltering economy. Coal and iron ore in particular are in the cross-hairs as they have rallied in recent weeks, despite the manufacturing slowdown that usually precedes the Lunar New Year holiday and constraints on industrial production due to the Beijing Winter Olympics.

Last week, Beijing summoned top state-owned miners, including China Shenhua Energy Co. and China Coal Energy Co., and asked them to cap prices at mines below 700 yuan a ton. That has led to a sharp fall in prices. 

China’s most active thermal coal futures on the Zhengzhou Commodity Exchange have fallen about 12% since closing at a two-month high on Feb. 8 and were last trading around 772 yuan on Tuesday.