Tuesday, October 4

China warns coal companies against dual contracts, keep prices stable


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BEIJING — China’s state economic planner on Thursday warned coal companies operating at ports in the Bohai Bay region to comply with their long-term contracts to keep prices stable ahead of the peak winter demand period.

The National Development and Reform Commission (NDRC) said in a statement that it investigated coal companies in the cities of Qinghuangdao, Tangshan, and Cangzhou in Hebei province and Jinzhou in Liaoning province because of recent price rises.

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The NDRC specifically warned the companies to respect their signed medium and long-term contract prices for thermal coal and that it prohibits the use of so-called yin and yang contracts.

Yin and yang contracts are when companies present one contract that complies with national price guidelines for coal to the government while signing a second contract that is higher than the guidelines.

(Reporting by the Beijing newsroom; Editing by Christian Schmollinger)



financialpost.com

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