China plans to release its first government-backed regional coal price index, called the Bohai Rim Thermal Coal Price Index, said a official with the Pricing Department of the NDRC (the National Development and Reform Commission) this week.

The price index will incorporate spot coal prices from the ports of Qinhuangdao (QHD), Jingtang, Caofeidian and Huanghua, which are major coal ports to transship thermal coal produced in northern China to coal-consuming eastern and southeastern provinces. The price index is aimed at bringing more transparency and reliability to spot coal pricing out of northern China and improving the coal market system, according to the Pricing Department of the NDRC. It is learned that the CCTD (China Coal Transportation and Distribution Association) held responsible for monitoring nation-wide ex-mine coal prices, will play a vital role in data collection for the price index purpose.

Currently, the QHD spot prices released by the CCTD on a weekly basis, are widely used as China's benchmark thermal prices to monitor the country's spot coal pricing trend, and compared with other international benchmark prices especially in the ports of Newcastle and Richard Bay.

We believe this move can be regarded as part of its efforts to publish broader coal price index designed to monitor coal prices across the country in the future. The NDRC has worked on this type of price index for some time. It is not known how soon the index will be published to the public.