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Supply guarantee policy reshapes coal market
{alcircleadd}In May 2021, the Chinese government rolled out the coal supply guarantee policy to address an abrupt coal shortage that had quickly pushed up the fuel prices and caused power cuts in a few areas of the country. The subsequent droughts which dampened hydropower generation and the Russia-Ukraine conflict from 2022 further underscored the national energy security, elevating coal's role in this key task.
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The policy has been optimized constantly in the following couple of years with broader capacity expansions, wider coverage of coal medium- and long-term contracts, stricter contract fulfillment requirements, limits for spot prices and quality-based disparity in contract prices.
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