After setting ceiling prices onpower coal, China is likely to issue new regulatory policy concerningcoal industry, disclosed an official of the National Bureau of Energyat an energy supply meeting held in Taiyuan, capital city of northChina's Shanxi Province.

    The new policy will include stepping up construction of 13 coalbases and transport passages, continuing efforts in rectifying smallcoalmines, eliminating outdated production capacity, improving coalcirculation order, building a coal trading system, and establishinglong-term supply relations between coal enterprises and electricityplants.

    China's price regulator National Development and ReformCommission (NDRC) stressed again Thursday setting ceiling prices onpower coal at main ports and distribution bases, stipulating that theaverage price at the ports of Qinhuangdao, Tianjin and Tangshan maynot exceed the June 19 price of 860 yuan, 840 yuan and 850 yuan perton respectively.

    The price ceiling policy of NDRC has affected power coal supplyof coal enterprises. The move may ease pressure on CPI growth, butrestricting price of coal is not a long-term policy, which may bringabout contradictions in the sector, said a electricity industryexpert.

    Electricity output of China increased 8.3 percent year on year to293.4 billion kwh in June, of which 230.6 billion kwh were thermalpower, up 6.8 percent, which was the lowest growth since June lastyear.

    The shadow of electricity shortage has sharpened thecontradiction between coal and electricity sectors.

    The country is estimated to face an electricity shortageamounting to 16 million kw this summer. Besides the Huangneng Group,the country's four major power groups are still running in the red.

    Due to the continuous rises of coal price, the power companies arefacing growing pressure in operation.