I could only assume this new government announcement is a good...

I could only assume this new government announcement is a good thing for already profitable BGG UPDATE 1-China to end govt intervention in thermal coal market Fri Dec 21, 2012 6:42am EST SHARE THIS ARTICLE Email Facebook Twitter (Adds details, background) By Fayen Wong SHANGHAI, Dec 21 (Reuters) - China, the world's top coal importer, said it would scrap a regulation to cap spot thermal coal prices and would no longer intervene in annual coal price negotiations between sellers and utilities starting in 2013. China's coal market has stabilised, and the sector no longer needs such rules, the National Development and Reform Commission (NDRC) said in a statement on its website on Friday, adding that the move was aimed at reforming the coal industry. Most traders said the government's decision to take its hands off the market, first reported by Reuters in late November, could help boost imports as domestic prices would no longer be kept artificially low. Coal price contracts currently are signed every year at an annual meeting organised by the NDRC and the industry association. Coal suppliers have to sell certain quantities to power companies at prices set far below market rates. Under this system, power companies have managed to buy around half their annual coal consumption at preferential rates. Contract prices for 2012 were set at around 599 yuan ($96.14) per tonne, and the government introduced a price ceiling on spot coal prices in late 2011 of 800 yuan ($130). In the international market, Australia's Newcastle spot thermal coal index has fallen around 30 percent this year to about $84 this week. Coal producer sources said they would continue to ink long-term contracts with power companies but that, instead of a headline price for the whole year, the terms would be adjusted on a more regular basis to better reflect market conditions. The end of government intervention is not bad news for power companies such as Huaneng Power International and Datang Power , analysts have said, given that China's coal market is likely to be well supplied over the next few years. Coal producers said they have had preliminary talks with buyers on volumes for the 2013 term contracts. Some said the volumes would be largely unchanged and that they want to guarantee sales, since the market could again be oversupplied next year. Traders said the timing of the government's decision suggests Beijing is no longer worried about coal shortages at home, which led to severe price spikes in 2008 and late 2010. "Production growth has risen over the past few years, but demand growth has slowed. Imports have also risen sharply, and that can easily fill any temporary shortage that might emerge in the future," said a Beijing-based trader. China's coal imports in the first 11 months of 2012 have jumped nearly 30 percent to 205.5 million tonnes. Analysts said China's coal imports are expected to rise further in 2013 on the back of weak overseas demand and low international coal prices. ($1 = 6.2302 Chinese yuan) (Editing by Ron Popeski and Jane Baird)