China's National Development and Reform Commission imposed further port restrictions on coking coal and thermal coal until the end of 2018 at ports across China, market sources said Thursday.
Sources said that NDRC had verbally informed General Administration of Customs during a meeting in Jiangsu held Wednesday that any imported coal would no longer be able to clear customs until the end of 2018.
Under current restrictions, cargoes which have been booked earlier were allowed to unload at Chinese ports, but were not allowed to clear customs. Furthermore, users are expected to pay demurrage-related fees for cargoes that had been unloaded at ports but not approved by customs.
Sources said the restrictions were because NDRC aims to control the total volume of imported coal into China. According to customs data, China imported 271.13 million mt of coal in 2017, at an average 22.59 million mt a month. This compares with 202.63 million mt imported over January-September 2018, a monthly average of 22.51 million mt.
Controlling imports may help support domestic coking and thermal coal prices, a trader said.
"Domestic prices increased recently, and the arbitrage between seaborne and domestic coking coal has narrowed," a Chinese steelmaker said, adding that such a situation had rendered seaborne coal competitive.
S&P Global Platts assessed the CFR China equivalent of Shanxi PLV at $222.12/mt Wednesday, putting the domestic-seaborne price arbitrage at 88 cents, with the domestic material being the cheaper one.
The port restriction news boosted domestic prices, with coking coal futures on the Dalian Commodity Exchange rose Yuan 33.50 or 2.48% to close at Yuan 1,382/mt Thursday.
Port-related restrictions have been frequently imposed by the Chinese government this year. In April, users of southern ports were notified they would no longer be able to receive any imported coal.
In East China, ports such as Fangcheng and Zhoushan were allowed to handle imported coal but faced restrictions. In July, Northern ports such as Jingtang had truck-related restrictions imposed, under which diesel-fueled truck were banned as an environmental measure.
Platts assessed Premium Low Vol coal steady at $223/mt FOB Australia, while the CFR China price was down 50 cents at $222.50/mt Thursday.
Source:S&P Global Platts
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