China's coal prices are falling from their peaks as international energy prices decreases and domestic macroeconomic adjustment policies pay off.

     According to data published by China Logistics Information Center on Sept. 27, China's coal production stayed stable in August and net export sustained, but market coal prices saw the first dip since this April.

     Latest data also shows that the index on the prices of the country's coal in circulation in August is 2.7 percentage points lower than previous month.

     Experts say four major factors dragged down coal prices.

     The country's National Development and Reform Commission have introduced two policies capping power coal prices in 2008 and the polices indeed are paying off.

     To ease domestic supply tension, the government imposed export tariff on coal export also in 2008, resulting in steady shrinkage of coal export.

     Falling international energy prices is also a reason since China's coal market is relatively more open to overseas market as compared to other energy products as oil and gas.

     The passing high-demand season in summer also leads to lower power coal demand. Coal demand is seeing a brief off-season before winter heating season comes.

     Economic slowdown in developed southern areas and ampler-than-ever power transfer from west to east make power coal inventories to mount. By September, the inventories hit a historic high and well double the one-year-earlier amount.

     Experts, however, believe that China's coal prices will still maintain at a relatively high level over to-come heating coal demand in winter, bottlenecked railway transportation capacity, rising coal production cost, and still-high international coal prices.