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China’s powerful state planning agency is weighing intervention in the coal market after rising prices for the fossil fuel added to the country’s energy crunch.

Record prices have made it too expensive for coal-fired power stations to operate at a profit, forcing them to curtail output and adding to electricity shortages that are crippling the country’s economy.

The National Development and Reform Commission said on Tuesday it had organised a meeting with big coal producers and the China Electricity Council.

“The National Development and Reform Commission will . . . study specific measures to intervene in coal prices,” the planner said in a statement.

In the wake of the comments, thermal coal futures for December traded on the Zhengzhou Commodity Exchange fell 8 per cent to just Rmb1,928, having earlier climbed above Rmb2,000, or $300 a tonne.

The NDRC said the move might be needed because coal prices were still rising and the fossil was an important energy source as the country entered winter. Thermal coal is burnt in power stations to generate electricity.

“The current price increase has completely deviated from the fundamentals of supply and demand, and the heating season is approaching, and the price is still showing a further irrational upward trend,” it said.

Beijing has already ordered coal producers to boost output, with officials in Inner Mongolia, one of China’s largest coal-producing regions, instructing 72 local miners to expand capacity by 100m tonnes.

However, many analysts and coal traders are sceptical that production can be increased quickly enough to make a difference this winter.

China has also banned imports of coal from Australia because of a diplomatic spat over the origins of Covid-19, a decision it is unlikely to reverse.