China customs mulls increasing checks on coal imports, impeding flow: traders
Senior officials at China’s General Administration of Customs agency are meeting Tuesday to discuss plans to increase checks on seaborne cargo arrivals, a move a number of market sources say could slow down the flow of thermal coal imports into the country.
The agenda for the top level meeting was said to include the possibility of intensifying customs checks on imported thermal coal at Chinese ports, and also requiring increased documentation, market sources said.
“[The] discussion topic is about limiting and checking all import coal … this will prolong the clearance of imports,” said one market source familiar with the matter.
Another market source said he received information late Monday that from July 1 some Chinese ports will no longer be able to accept deliveries of imported thermal coal unless they have an official permit issued by China’s General Administration of Customs.
His interpretation of this measure was that Beijing has requested action to reduce the flow of imports of seaborne-traded thermal coal into some specific ports in China.
Many Chinese ports currently accepting discharges of imported thermal coal from arriving ships do so without any official permit, and those that do usually have to reapply for a permit that expires on June 30 each year, said the second market source.
“Therefore, if the government wanted to reduce imported coal, they can just cancel the latest applications from July 1,” he said.
In a related market development, a weekend a gathering of China’s National Development and Reform Commission discussed policy settings for the domestic coal market for the second half of 2017.
NDRC officials talked about the practicalities of Chinese domestic coal producers releasing additional supply to cool an overheating domestic market, sources said.
The overriding concern of Chinese government officials is to “make sure prices do not keep going up in the summer months,” said one market source familiar with the talks.
Port prices on an FOB Qinhuangdao basis for spot shipments of domestic thermal coal have accelerated from Yuan 555/mt for the 5,500 kcal/kg NAR grade in the first week of June to surpass Yuan 600/mt this week.
Traded levels in the spot market are at Yuan 600-605/mt FOB North China ports for the 5,500 kcal/kg NAR grade, according to market sources.
Traders Tuesday said FOB Qinhuangdao cargoes of 5,500 kcal/kg NAR thermal coal were being offered at Yuan 620/mt by Chinese producers and at a higher Yuan 630/mt by Chinese traders.