Posted on 09 Mar 2022
China will take further steps to ensure that the prices and availability of crucial commodities including those of energy, agricultural produce and steelmaking raw materials remain stable, the National Development and Reform Commission (NDRC) announced on Monday in response to skyrocketing commodities prices.
"Since the beginning of this year, the combined influence of multiple factors including the pandemic, monetary policy shifts among major economies and especially the escalation of geopolitical conflicts have seen the situation regarding international commodity prices become more severe, complex and uncertain," Hu Zucai, the vice chairman of NDRC, said at a press briefing held by the State Council Information Office on March 7.
Recently, the upward climb in prices of many commodities such as crude oil, coal, natural gas and iron ore has created a new challenge (for the government) to ensure domestic commodity supply and price stability, Hu said, stressing that China will make more efforts to secure energy supply and steady prices, focusing on coal.
Specifically, China will accelerate the building government-deployable coal reserves totaling more than 200 million tonnes, Lian Weiliang, another NDRC vice chairman, told media at the briefing.
Lian also said that China will ensure that medium- and long-term contracts for coal, electricity and gas in key industries that relate to people's livelihoods and economic development are fully executed, to ensure coal prices remain within a "reasonable" range.
Despite the country's rapid expansion of renewable energy resources, currently China remains heavily reliant on fossil fuels for power generation. According to Hu, coal accounts for 56% of China's total energy consumption and coal-fired power generation accounts for about 60% of all the electricity produced.
In 2021, China produced 4.07 billion tonnes of raw coal for all uses, higher by 4.7% on year, according to data released by the country's National Bureau of Statistics.
Meanwhile, as part of plans to increase the effective output of all types of power generation, China will vigorously promote the construction of large facilities in desert areas to harness wind and solar power and will significantly increase pumped storage for hydroelectricity and other peak-regulating power sources, Lian said. At the same time, China will increase investments in oil and gas exploration and development, release advanced coal capacity in an orderly manner, and maintain coal production at a reasonable level, he said.
As for iron ore, Hu remarked that China will ensure supply chain security, including stepping up domestic iron ore exploration and development, expanding the recycling and utilization of steel scrap and other renewable resources, and strengthening the regulation of imports and exports.
NDRC will also pay close attention to the supply, demand and price trends in key commodity markets and strengthen monitoring and analysis of them. Market supervision will be intensified, joint supervision of spot market movements will be strengthened, and illegal activities such as fabricating and spreading information on price rises, hoarding and price gouging will be severely dealt with. In particular, "malicious" speculation will be banned, Hu warned.
Over the past several weeks, NDRC has implemented a series of measures to calm the surge in iron ore prices, as reported.
Source:Mysteel Global
