Baxia Markets
May 21, 2021

Does China Control The Market For Coal?

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The price of Coal plummets as China takes action to stabilize domestic supply and demand.


Coal, along with other commodities such as steel, iron ore and copper, have seen a price hike post lockdown as the demand is increasing around the globe. China, as the world’s biggest user of said commodities, made a statement earlier on Wednesday saying it will strengthen its management of commodity supply and demand to better manage the price increase. Their intention, according to the country’s cabinet, is to prevent the price hike from being passed on to consumers.


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In the report, the Chinese government said it would crack down on malicious trading and investigate behavior that bids up prices. In the meantime, the country also urged its domestic coal producers to boost output in order to meet peak demand in summer. 

Reacting to the report, thermal coal futures on the Zhengzhou Commodity Exchange fell down nearly 8%. Similar price plunges occur in other commodities such as iron ore, steel rebar and hot-rolled coil. The price fluctuation is yet to reflect in the international market, but with China’s aggressive policies and its dominant position in raw material consumptions, its influences on the commodity market is not to be overlooked.


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