China imposes restrictions on coal imports at southern ports
Date: Tuesday, April 17, 2018
Source: S&P Global
Thermal and coking coal imports at ports in southern China, including Fangcheng and Xiamen, came under restrictions over the weekend, market sources said Monday.
Mill sources said that port authorities had told them informally that several ports would no longer be able to receive any imported coal, while others may have certain restrictions imposed.
Sources said ports in Fujian province -- Xiamen, Quanzhou and Meizhou -- would no longer be able to receive any coal imports. A mill source in Fujian province said that he had received verbal confirmation late Friday evening from customs officials, but was unable to get any specific details on the restrictions.
With Xiamen port coming under restrictions, the steel mill source said it could no longer consider seaborne coking coal despite it being cheaper than domestic material.
A Xiamen-based trader said that the port restrictions were aimed at limiting thermal coal imports as there were ample stocks at the port.
Other ports such as Fangcheng and Zhoushan in East China were allowed to handle imported coal, but under restrictions, sources said.
More details were, however, unclear, they said, adding that they had received the news only on Monday morning. A mill source said that unloading of vessels at Fangcheng port might face delays as a result of the restrictions.
The authorities were likely to review coal import volumes on a monthly basis and change the restrictions accordingly, a trader said, adding that this increased uncertainty about the impact on the market.
End-users who import directly might be allowed to negotiate, but not the traders as far as imports through certain ports were concerned, a miner source said.
The restrictions were likely to be in place for the next six months, a steelmaker source said, adding that it would take that long for domestic thermal coal prices to stabilize.
China's domestic 5,500 kcal/kg NAR thermal coal was assessed at Yuan 555/mt FOB Qinhuangdao last Friday, down Yuan 85/mt month on month.
As for coking coal, Platts assessed Premium Low Vol CFR China at $199/mt Friday, down $5/mt on the week.
S&P Global Platts assessed the CFR China equivalent of Shanxi PLV at $225.26/mt on April 11, putting the spread between domestic and seaborne prices at $26.26/mt, with seaborne coal being the cheaper material.
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