Singapore — China's domestic thermal coal prices are likely to come under close watch in coming weeks as the country strives to keep prices of essential goods stable during the Lunar New Year holiday period in February and key annual political meetings in March, market sources said Friday.
The country's top planner National Development and Reform Commission issued a notice on Thursday requesting departments in all regions "effectively ensure stable supply and prices of important goods during the Spring Festival of 2019 and the 'two sessions'."
The Spring Festival or Lunar New Year holiday falls on February 4-10 this year, with industrial activity typically winding down around a week or two before that.
The "two sessions" are the annual parliamentary meeting of the national legislature National People's Congress and the top political advisory body Chinese People's Political Consultative Conference that are held in Beijing each year in early March.
The NDRC notice specified scrutiny of transport and supermarket costs, but market sources said thermal coal prices would also be closely watched.
"During the 'two sessions' the government will always want to ensure everything is stable and that includes thermal coal prices," a trader said.
However market sources expect domestic thermal coal prices to increase after the Lunar New Year holiday after a fatal coal mine accident on Saturday in Shaanxi saw more than 70% of mines in the province shut for safety inspections, sparking concerns of a looming supply shortage.
The safety checks have also been extended to Shanxi and Inner Mongolia in recent days, industry sources said.
The inspections are expected to continue until after the "two sessions" in March to ensure the meetings are not overshadowed by major incidents, the sources said.
"This is especially so as this year marks the 70th anniversary of the founding of new China," said a trader in China.