The Zhengzhou Commodity Exchange (ZCE), one of China's three futures exchanges, may introduce trading of thermal coal futures later than expected thanks to contract design problems, the China Energy News reported Sunday, citing an insider close to the matter.

The ZCE modified the contract after exchange officials realized that they had overlooked blending practices routinely employed by thermal coal users, a mistake which may push back the contract's debut until the second half of this year, the anonymous source said. The ZCE was unreachable for comment Sunday.

"It's typical for domestic power plants to blend high-heating-value thermal coal with lower-value coal as a way to promote efficiency and reduce costs, so delivery problems could emerge if the contract isn't designed with this in mind," Guan Dali, a coal analyst with market intelligence firm chem365.net, told the Global Times.

The pricing of thermal coal - the most common variety of coal in China - has drawn increasing attention from regulators over the past several years. Industry statistics show that China's coal output reached 3.65 billion tons last year, 2.91 billion tons of which were thermal coal. Meanwhile, the country's power producers consumed about 1.94 billion tons of thermal coal in 2012.

It was in October 2012 that the State Council approved the ZCE's application to create futures contracts for the commodity in an effort to give China more of a voice in international coal pricing. According to the exchange's proposal, the contract's lot size is 100 tons with a minimum price fluctuation of 0.2 yuan ($0.03) per ton. The daily price limit of the contract is also currently set at 4 percent above or below the closing price from the previous trading day, with the minimum margin requirement set at 5 percent of the contract's value.

Yet considering the current trading situation with coking coal, Guan from chem365.net questioned whether the thermal coal contract would actually help the industry hedge against pricing risks.

"If the industry's involvement with the new contract is low, as is the case with coking coal, the product will have little impact on the spot market," he added.

The Dalian Commodity Exchange instituted coking coal futures trading on March 22, yet most deals so far have been struck by institutional investors rather than coal producers and consumers.

"Domestic coal producers are not accustomed to being proactive in the capital market, which stems from their robust profitability over the past decade when thermal coal was generally in short supply," said Guan, adding, "And then there's government intervention in the market."

The National Development and Reform Commission (NDRC), the country's top economic planner, took its hand off the thermal coal market at the beginning of this year. Previously, the NDRC had capped thermal coal prices and organized coal price negotiations between suppliers and power plants on an annual basis.

"Only once the market becomes bearish on coal will producers consider using the tool  against price adjustments," Guan said.