Energy | Mike Bastin

The recent decision to rescind the cap on thermal coal prices has surprised many and led to intense speculation over the likelihood of an imminent and substantial price hike. However, the decision was made because prices are stable, if not declining.

The move to cancel limits on thermal coal prices will not lead to sharp price hikes as industrial demand is sluggish, especially in energy-intensive industries, amid the global economic slowdown and the continued slowdown across China.