Government authorities would regulate the blindness in price hike by coal enterprises, as the current spot coal prices have risen notably on tightening supply at a time when miners are expected to settle prices with end-users under 2010 contracts, said an official with the China National Coal Association (CNCA).

Coal enterprises should set the price based on the bearing capacity of the society and end-users in its upper and down stream sectors, said vice chairman of the CNCA. The government will not sit by, but take necessary measures to curb blind hike, he added.

Coal prices at Qinhuangdao port, the benchmark for domestic market, recently climbed again on demand. As of Dec 28, Shanxi premium blend with calorific value of 5500 kcal/kg rose to 770-790 yuan/t, FOB, while Datong premium blend of 5800 kcal/kg at 810-840 yuan/t.

In an issued circular Dec 15, the National Development and Reform Commission (NDRC) said it would work with relevant departments to decide principles and policies for annual contracts, and solve issues that might appear in the process of contract signing.

This indicates the NDRC's stance to reduce intervention in price negotiations, but doesn't mean to step out, said an expert.

In the past, relevant authorities had stepped in to curb dramatic fluctuation in coal price and keep the market stable.

The solution is to increase coal production, or the price will rise further, the expert added.