China to encourage mergers among coal companies

This is to hike operational efficiency amongst them.

The National Development and Reform Commission (NDRC) of China will encourage Chinese coal companies to restructure and to merge, to increase operational efficiency and to take measures to return to more reasonable coal price ranges, according to Enerdata.

Coal prices are currently surging in China (+26% in futures prices in the first months of 2017) and are hitting records, due to mandatory production capacity reductions to cut over-capacities and air pollution.

"Consequently, coal inventories at major utilities are at their lowest levels since at least 2014 and power utilities may have to buy large coal amounts in case of a hotter-than-average summer," Enerdata said.

This story was originally published by Enerdata.