More coal for China’s power stations

China's coal and electricity producers to use 56% more coal in 2013.

They signed deals for a total of 1.9 billion metric tons of coal for 2013, an increase of 55.8% year-on-year.

The large increase in supply is due to the liberalization of coal by the government last December and a liberalization in electricity prices. Electricity companies are willing to buy more coal due to uncertainties in future supplies. Coal producers want to sell more coal to pare rising inventories of the commodity,

Most power generated in China comes from coal-fired plants. To keep electricity tariffs stable, the government has asked coal suppliers for years to sell to power firms at contracted prices, which are far below market rates.