China's top economic planner is moving to improve the price formation mechanism in its coal market to guide price movements within a reasonable range and ensure stable energy supplies in the country.

In a circular released Thursday, the National Development and Reform Commission (NDRC) put the relatively reasonable range for the medium and long-term trading of 5,500 Kcal thermal coal at Qinhuangdao Port at 570 yuan (about $90) to 770 yuan per tonne.

Taking into consideration logistics and production costs, the NDRC accordingly clarified the ex-mine prices for medium and long-term trading in major coal production areas including Shanxi, Shaanxi and Inner Mongolia.

"Proposing a reasonable range is not to adopt government pricing for coal, but to establish a range regulation mechanism on the basis of market-formed prices," NDRC official Wan Jinsong said, adding that the move could enable a better combination of the roles of the market and government to avoid drastic fluctuations in the market.

The Commission also pledged to enhance the country's capacity to balance supply and demand, strengthen market supervision to prevent improper interventions and investigate illegal market practices.

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