Chinese import quotas for coking coal tighten

Chinese import quotas for coking coal tighten

Posted on by admin

Adds specific impact on coking coal, quotes from coking coal market participants

Chinese customs authorities appear to be clamping down yet again on Australian coal imports, as many state-controlled power plants have reportedly been told to stop importing Australian coal. Most steel producers in China have not received similar notices but have noted stricter policies on import quotas recently.

The suspension was heard to take effect on 1 July, but Australian cargoes that have been booked may still be accepted by Chinese ports, some traders said.

“It seems like the suspension might apply to thermal coal only for starters,” an Australian coal producer said. “So far, none of our customers have reported more trouble with securing customs clearance. The few that have trouble have been struggling with it for quite some time, so it is nothing new for them.”

But at least two steel producers, one in north China and another in east China, have been informed to halt all imports of Australian coking coal because import quotas were fast running out. Other steel producers, especially major importers of coking coal, have not received any notice or directives from customs authorities yet.

“Policies around import quotas have indeed become a lot stricter recently,” a Beijing-based trader said. “Previously, steel mills with quotas would usually be allowed to import without any major issues, but many of them are now facing long waiting times for customs clearance, and clearance might be done on a case-by-case basis even despite them still having import quotas left over,” the same trader added.

Many market participants have pointed out that these tighter restrictions are hardly surprising, especially after China’s state-backed coal transportation and distribution association (CCTD) called on authorities last weekend to limit Australian coking coal imports as domestic coking coal producers find it increasingly difficult to compete with relatively cheaper imported coal.

This latest suspension on coal came after China suspended beef imports from four major Australian beef exporters earlier this month, amid heightened tensions between the two countries as a result of Australian support for the US to start an inquiry into the origins of the Covid-19 outbreak in Wuhan.

Chinese customs slowed clearing for Australian cargoes in February last year, and customs clearance for cargoes this year have taken up to 40 days at some ports. But coking coal imports from Australia surged by 84pc to 14.2mn t from January-March 2020, up from 7.7mn t over the same period last year.

Leave a Reply

Your email address will not be published. Required fields are marked *