China is considering the formation of a national coal trading centre, a project that could be launched next year, the official Shanghai Securities News reported on Friday.
A preparatory seminar will be held next month to discuss the proposal, the paper quoted unnamed industry sources as saying.
China's current coal trading system is informal and largely influenced by government intervention, with many annual contracts signed during an annual coal trading fair.
Limited transportation capacity on the state-owned railway network has also restricted the flow of coal, pushing up coal prices and adding to opaqueness in the market.
But in three to five years, China plans to build a more market-oriented and transparent coal trading system, the paper said.
Such a national coal trading centre, together with its regional branches, would organise coal trading fairs and launch spot trading in the short term, and introduce over-the-counter trading and futures when the time is ripe, the paper said.
China is currently facing a severe power shortage, mostly caused by tight supplies of thermal coal, whose price has surged this year, making power plants unable or unwilling to stock up on the fuel that generates about one fifth of the country's electricity.
by Rujun Shen, Reuters
