Experts call on China to establish coal reserve mechanism and coal market

Zhu Hongren, deputy director of the Economic Operation Bureau of the National Development and Reform Commission, said yesterday at the "2007 Annual Economic Operation Press Conference" that the National Development and Reform Commission is actively studying and considering various ways for coal to comply with modern transactions.

According to the statistics of the China Electricity Regulatory Commission, as of January 25, the country’s coal stocks were about 21.42 million tons, which is less than half of the normal coal deposits. At present, the coal reserves are still falling at an average daily rate of nearly 300,000 tons. Wang Junmin, vice chairman of the Electricity Regulatory Commission, pointed out that there are now 17 provinces in the country that have experienced power cuts. One important reason for power cuts is the tight supply of coal. In addition, serious snow, ice, and freezing disasters that have recently occurred in parts of China have kept the coal, electricity, and oil transportations from continuing to be strained.

In view of the coal shortage shutdown phenomenon, Zhou Chengxiong, the Institute of Finance of the State Grid Beijing Economic and Technical Research Institute, called for China to establish a coal reserve mechanism and a coal futures market.

He told reporters that the significance of material reserves should not only be to deal with the lack of materials, but also should play a role in regulating the market and preventing sudden market fluctuations. When the sudden rise in coal prices led to the occurrence of Yan Coal, the sale of reserve coal could effectively ease the tight supply situation and crack down on hoarding.

In fact, the proposal of the coal reserve mechanism has attracted the attention of the National Development and Reform Commission. Zhu Hong Ren told reporters yesterday that all forms of modern transactions are actively studied and considered.

Zhu Hongren said that changing coal orders from coal mines to supply and demand for coal for several decades and establishing a centralized coal trading market will become the direction of future coal trading reforms.

At the same time, Zhu Hongren pointed out that the state does not consider increasing the amount of power generated through the issuance of small coal-fired power and small thermal power to solve the current difficulties in coal-fired power. At present, we must do our utmost to ensure the protection of coal, electricity and oil transportation. Under the premise of ensuring safety, we will organize coal mine production and increase coal supply.