Chinese Government has significantly extended restriction on coal imports, on the back of higher imports during the first quarter.
As per the data provided by Chinese customs, total coal imports by the country was recorded 75.41 MnT during the first quarter of CY18 (Jan’18-Mar’18), up 17% Y-o-Y compared to 64.67 MnT in the corresponding quarter of CY17.
Major ports in Southern China have now imposed some sort of limitation over all types of coal imports. However, the impositions have varied in terms of form and degree, as some of them were completely banning the imports, while others were only banning a certain user group and tightening their custom clearing procedure.
Following the restrictions at two of the terminals at Fujian province, ports in Guangxi, Zhejiang, and Guangdong had also started to confine imports this week.
Fangcheng port and Qinzhou port in Guangxi province had forbidden coal imports from trading houses, whereas, only local end users at Zhuhai Gaolan port and Zhanjiang port in Guangdong province would be allowed to take imports from this week onwards.
Zhoushan port and Yuhuan port in Zhejiang province had also imposed restrictions on imported coal, allowing clearance of shipments for those who have already declared a discharging port.
The imposition on coal imports are assumed to be taken as a preventive measure to keep the imports stable or below the levels witnessed during CY17. However, no official announcement has been regarding how long the restrictions would last.
The news will, however, exert further pressure on the declining Indonesian coal prices, which has already been weighing down on low Chinese demand. Indonesian 4200 GAR coal offer was heard at USD 41/MT, FOB Kalimantan this week, having significantly fallen from the previous month’s price of USD 52/MT.
At the same time, the restrictions would provide a sigh of relief to the domestic coal suppliers, which were sitting high on inventory having suffered a slide in prices for the past couple of months.
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