China cancels one-year control on thermal coal prices

China's price regulator will end its one-year control on thermal coal prices beginning Jan. 1, 2013.

The decision was made because prices are stable based on balanced demand and supply. Prices of thermal coal will be decided by suppliers and consumers, according to a statement issued by the National Development and Reform Commission.

"The move to cancel limits on thermal coal prices will not lead to sharp price hikes as demand is sluggish amid the global economic slowdown," said Zhang Yongjun, an analyst with China Center for International Economic Exchanges (CCIEE).

The NDRC on Nov. 30 last year decided to control prices of thermal coal from Jan. 1, 2012 to put a stop to soaring coal prices.

It allowed the contract price of major thermal coal to float by no more than 5 percent this year from last year. The market price of 5,500-kilocalorie coal should be capped within 800 yuan (126.98 U.S. dollars) per metric ton at major shipping ports in north China.

The country's power consumption, a key barometer of economic activities, rose 7.6 percent year on year to 413.9 billion kilowatt-hours (kwh) last month, higher than October's 6.1-percent rise, according to the National Energy Administration.

It was the second straight month of acceleration, according to the administration.