(Yicai Global) Nov. 22 -- Chinese authorities will bring the high market price of coal down to a more reasonable range, state-owned news agency Xinhua quoted Lian Weiliang, vice president of China's top price setter and economic planner, the National Development and Reform Commission, as saying on Nov. 21 at the China Coal Trade Conference.

"Overall, the coal industry is seeing a balance between supply and demand," Lian said. "The price of coal is decreasing towards a rational level due to the decisive role of the market in resource allocation, our government and common development expectations among the coal sector and relevant industries."

Though the coal market has seen an overall balance in supply and demand since the beginning of this year, a range of other factors, particularly violation of laws affecting capacity development, saw some regions suffer a supply shortage and price fluctuations, he added.

As well as quality coal companies developing further and coal transport expanding, yields, transport volumes and coal stocks have all increased significantly, Lian continued.

Addressing market concerns about the future development of coal enterprises bringing back overcapacity problems, he said a series of long-term smart management mechanisms will help prevent excess capacity and keep coal prices down.

Lian believes that next year will see abundant coal supplies, which is what will keep prices rational. National coal capacity is currently around 5.2 billion tons, with the effective capacity for 2018 closer to four billion tons when compensating for infrastructure and mine development. Coupling this with next year's net imports, it will be possible to ensure an overall supply-demand balance.

"It is normal to see price fluctuations in this changing market," he continued. "We have to respect the market rule, but should also lead coal prices back to a rational range by building industrial operation mechanisms to avoid radical changes."