China weathered its coldest December in the last seven years.
The occurrence sent households to need heating during the cold months, majorly sourced from coal.
The country’s booming post-pandemic economic recovery which paved the way to record-high manufacturing and industrial activities added to the burden of supply.
In the past month, the government resorted to halting importing the commodity from its key trade partner Australia.
This came after the latter called for an investigation over the source of the Covid-19 virus which affected millions around the world.
Similarly, the administration’s ongoing crackdown on illegal coal mining activities also added to the burden.
With these developments, prices skyrocketed to unprecedented highs leading to the halt on the updates on the country’s major coal-price indices in the past weeks.
The China Electric Council which is one of the biggest electricity producers in China stopped the update on the widely-watched China Electric Coal Index or CECI.
The firm cited that the surging spot prices together with the “chaotic market pricing” is said to be the reason behind the halt, as stated in the public announcement.
Consequently, another leader in the field followed suit.
China Coal Transportation and Distribution Association (CCTD) also halted publishing its spot price on thermal coal on the same day, citing the same reason.
The association, organic with the statement of its counterpart, attributes the halt on updates on the abnormal price fluctuations in the market.
According to experts in the field, the move signals the government’s intervention to add water to the overheated market.
The rare occurrence of a freeze out on charts makes it difficult for analysts to predict future market prices.
What’s Up with the Coal Price?
On the other hand, experts in the field noted that with coal supplies dwindling at an alarming rate, the trend of high prices will stay in the short term despite the absence of the update.
According to a report, the coal price in the world’s biggest consumer market hiked as much as 10% in December alone.
Before the data freeze that took place on December 30, CECI’s spot price rested at $115.50 per or 751 yuan per 5,500 kcal/kg of the commodity.
Similarly, CCTD’s spot price for the same amount is pegged at 706 yuan, indicating that both benchmarks showed record-high prices before the end of the year.
This is also the highest settlement of coal price in 2020.
According to an expert in the field, the market currently faces a volatile path ahead, undermined by speculations on prices and uncertainty in general.