China railway bureaus to sign long-term coal contracts: media

[BEIJING] China's state-owned railway departments will sign long-term transport contracts with coal suppliers and buyers to help implement annual coal supply deals, in the latest bid to meet winter demand and tame a months-long price surge, the China Securities Journal reported on Wednesday.

For annual supply contracts of more than 200,000 tonnes, railway bureaus will sign transport deals with key miners, the paper cited a senior railway official as saying following a coal trade fair at the largest coal port Qinhuangdao last week.

For larger contracts, with annual supply of over half a million tonnes that have fixed departure and arrival points, railway departments will look at signing deals with both the coal miners and buyers.

Miners and buyers this month started executing term supply agreements, with one of the first contracts priced at 580 yuan (S$120) per tonne for 5,500 kilocalorie/kg thermal coal, Shanghai Securities Journal reported on Wednesday, a level still significantly below spot rates.

China, the world's top coal producer and consumer, has in recent months been putting in place measures to prevent a winter shortage of coal, a concern following earlier government-enforced mine closures.

The government has told key miners to restart production and forced miners and utilities to sign contracts below prevailing spot rates.

REUTERS