China State Planner says law allows it to set price limits Adds detail, background, coal price response BEIJING, Oct 19 Reuters - The China coal futures fell 8% to their downward limit in the night trading on Tuesday as the country's state planner said it was looking ways for first step to bring record high prices for the fuel.
The most traded thermal coal contract on the Zhengzhou Commodities Exchange, for delivery in January, fell to 1,755. 40 yuan 275 yuan a tonne, having touched an all-time peak of 1,982 on Tuesday's daytime session in Tuesday's sunday session amid a widening power crunch and the onset of cold weather.
A shortage of coal, China's main fuel for power generation, has led to the electricity rationing in many Chinese regions and curbed GDP growth in the world's second biggest economy.
The 8% drop in thermal coal futures was the steepest plunge since August, although prices are still up more than 250% year-to-date.
The drop occurred at the start of the night session in Zhengzhou as the National Development Reform Commission NDRC said it was studying ways of intervening in high coal prices and would take all necessary measures to bring them back to a reasonable range.
The current price increase has completely departed from the fundamentals of supply and demand, said the NDRC after calling a meeting of key coal producers, the industry association and the China Electricity Council.
The heating season is approaching and the price is still showing a further irrational upward trend, the commission added.
China will allow the government to set profit rates and limit price limits, the NDRC said, vowing to curb irregularities and keep market order.