Prohibited the increase in the price of key coal and did not allocate railway capacity to the export

The Interpretation of the Notice on Accomplishing the Coordinating Work of Coal Production and Transportation in 2011 Recently, the National Development and Reform Commission issued the Notice on Accomplishing the Cohesion Work of Coal Production and Transportation in 2011 (hereinafter referred to as the “Notice”). The "Notice" has specified specifications for continuing to improve the coal production and transportation demand convergence mechanism, reasonably configuring railway transportation capacity, regulating the behavior of market players, and stabilizing coal prices. As in previous years, the purpose of issuing notices is mainly to ensure that coal production and transportation across provinces and regions will be linked up in the coming year to ensure a stable supply of coal.

"Notice" will clearly adhere to the direction of reform, continue to push forward the market mechanism of independent convergence, negotiation and ordering of enterprises, and accelerate the establishment of a modern coal trading system that combines the government's macro-control with the market's main body's self-dealing transactions. All parties concerned must strictly implement the policy of convergence of production, transportation and demand. , shall not interfere with the company's autonomous convergence of contracts. Not long ago, some media said that some coal and electricity industry people proposed to the Coalition to re-start the coal ordering meeting and reconnect the coal production, transportation, and demand needs to the centralized connection. On the surface, centralized convergence and decentralized convergence are merely different ways of cohesion. In fact, there are deep differences among them. Centralized convergence not only has the shadow of a planned economy in the form, but also is easily subject to the relevant authorities in the specific convergence process. The impact, on the contrary, has a more market-oriented feature of decentralized convergence.

Therefore, these people suggested that restarting the coal ordering meeting and returning to the centralized convergence of coal should be aimed at allowing the government to intervene more in the coal price, in order to reverse the pace of the marketization of coal prices. In this "Notice", the National Development and Reform Commission clearly decided to continue to adhere to the direction of reform and insist on promoting the independent linking of enterprises. In fact, it reaffirmed the market-oriented reform orientation of coal prices and once again showed that the gradual marketization of coal prices is not only an inevitable trend, but also a government. What you want to promote.

While continuing to promote the independent connection between coal supply and demand, in view of the current heavy burden of stabilizing general price levels and managing inflation expectations, the “Notice” also clearly requires that coal and power companies should proceed from the overall interests of maintaining economic development and strengthen self-discipline in enterprises. 2011 In the convergence of production and transportation, the annual price of key coal power contracts will remain unchanged from the previous year, and prices may not be disguised in any form. The most controversial issue concerning the request that the price of coal and electricity parties' key coal contracts may not rise is the most skeptical. This holds that this is a retrogression in the reform of coal marketization.

However, the author does not think that the direction of the reform of the coal market is determined. It is in conformity with the objective requirements of the development of the market economy and cannot be changed by anyone. At the same time, the reform of coal marketization is also a gradual process. At present, controlling inflation is one of the major tasks of the government’s macroeconomic regulation. Under such circumstances, the possibility of an increase in electricity prices is minimal, and the cost pressures faced by power generation companies continue to increase. The financial situation of the power industry continues to deteriorate and cannot be passed in the short term. With measures such as system reforms to improve the operating conditions of power generation companies, the key to shortening the cost pressure on power generation companies by locking the price of coal under key contracts has become an inevitable, effective, and temporary choice. Therefore, prohibiting the increase in the price of key coal is not a retrogression in the reform of the coal market, but a temporary emergency measure.

It is worth noting that, in the "2011 Inter-provincial coal railway transport capacity allocation guidance framework" that accompanies the "Notice", for the first time, the railway transportation configuration for coal exports has been removed. The total coal transportation capacity allocation plan for 2011 was 932 million tons, an increase of 25.5 million tons compared with 2010, an increase of 2.8%. Among them, the distribution of coal railway capacity to the power industry was 76.90 million tons, an increase of 47.40 million tons over 2010, an increase of 6.6%; the allocation of coal railway (non-ferrous) industry coal railway capacity 94.53 million tons, an increase of 3.73 million tons, an increase of 4.1%; to the fertilizer (Chemical) industry allocated 38.4 million tons of coal railway capacity, an increase of 10.84 million tons, an increase of 45.2%; to the residents living coal allocation of 33.63 million tons of railway capacity, reduction of 1.07 million tons, a decrease of 3.1%; no allocation of railway capacity to coal exports, In 2010, 35.4 million tons of railway transportation capacity was allocated to coal exports.

From 2011 and 2010, the changes in the coal railway transport capacity allocation guidance framework can be seen that the bottleneck of coal railway transport will continue to exist in 2011. However, under the condition that the railway transportation capacity growth is limited, the relevant departments are also working hard to put more capacity resources. Tilt to protect people's livelihood. For example, the capacity growth of the fertilizer industry is much higher than that of other industries. This is due to the rapid growth of coal chemical industry in recent years leading to rapid growth in demand for coal. On the other hand, it also reflects that the government will increase the use of coal for fertilizer companies. The degree of protection and maintenance of the stable operation of the fertilizer market.

Compared with the changes in the configuration of coal and railway transportation in other domestic industries, the lack of allocation of capacity to coal exports in 2011 has caused widespread speculation, and some speculate that whether China will abruptly terminate coal exports altogether. In fact, in recent years, as China’s coal demand continues to rise, coal exports have gradually declined. In the first 11 months of this year, only 17.58 million tons of coal were exported, and this year should be less than 20 million tons. The 35.40 million tons of railway capacity is far from running out. At the same time, as the focus of coal production continues to shift westwards, the demand for coal railway transportation grows rapidly, while the growth of transport capacity is relatively slow, and the bottleneck of railway transportation exists for a long time.

Under the background of the continuous decline of coal exports and the bottleneck of domestic railway transport, the author believes that the failure to allocate railway coal capacity to coal exports in 2011 does not mean that coal exports will abruptly end. It is only due to the short-term bottleneck of domestic railway transport that it is difficult to mitigate the impact. More railway capacity will be used to protect domestic market demand.