China, the world's largest coalbuyer, is considering easing a proposed ban on low-grade thermal coal imports following protests by major utilities, trade sources said.
The new standards being considered would affect a much smaller proportion of imports and ensure that more supplies from Indonesia, the world's top steam coal exporter, would meet the minimum requirements.
“The NEA is looking at lowering the bar on calorific value, which means more imports will be able to get through,” said a source linked to a state-owned power company.
The National Energy Administration (NEA) is now looking to allow thermal coal imports with a minimum calorific value of 3,750 kcal/kg (NAR), down from the 4,540 kcal/kg limit that was previously proposed, trading and utility sources said.
The maximum sulphur content has also been raised to 2 percent from the earlier plan of one percent, trade sources said.
It was not immediately clear when a final decision on implementing the standards will be taken. Major coal miners in China said they have not been consulted on the revision.
Expectations that the proposed ban would be relaxed has already lifted Indonesian coal prices by around $1-$1.50 a tonne through the week as more Chinese buyers returned to the market, traders said.
As much as 10 percent of Indonesia’s annual coal output may be affected by the rules, according to the Southeast Asian nation’s coal mining association. The country typically produces cheaper grades that have lower calorific value than shipments from countries such asAustralia, the second-largest exporter. China, Indonesia’s biggest customer, blends the fuel with higher-grade supplies to reduce costs.
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