China’s Jiangsu province suspends coal imports

Source : https://www.argusmedia.com/en/news/2149990-chinas-jiangsu-province-suspends-coal-imports

 

East China's Jiangsu province has suspended coal imports after exhausting its 2020 import quotas, although fresh demand from other Chinese regions is driving up prices of Indonesian seaborne coal.

A few traders received verbal notices earlier this week from the Nanjing customs authority through clearing agencies that coal imports are no longer allowed. The Nanjing customs authority, which governs all major ports in Jiangsu, did not specify how long the suspension will last. Market participants expect it to be valid until the end of this year.

Local utilities, including plants operated by Huaneng, may have to cancel or delay cargoes they booked earlier. State-controlled power utility Huaneng booked at least two 50,000t cargoes of low-calorific coal through public tenders for delivery in October and December.

But the impact of the suspension in Jiangsu should be limited because many other utilities and trading firms had stopped buying imported coal about 1-2 months ago as their import quotas gradually got used up.

The full-scale suspension in Jiangsu followed a similar action by Shanghai municipality and Zhejiang province, which halted imports last month, also following the expiry of 2020 quotas.

 

Fresh quotas boost prices

Despite tightened curbs in most coastal regions, additional quotas allocated to northeast China provinces in August continued to spark utility demand for seaborne coal. This helped to lift Indonesian and Russian coal prices, which are getting through customs much more easily than Australian coal.

State-controlled power utility Datang issued a tender early this week to buy a total of 1.74mn t of low-calorific value Indonesian coal, mostly to be shipped in Panamax vessels, for delivery to its plants in northeast China over October-December.

A south China-based trading firm booked a Panamax cargo of Indonesian NAR 3,800 kcal/kg (GAR 4,200) coal at $28/t today, which was much more expensive compared with another Panamax cargo of the same coal that it had booked at $26/t fob on 9 October.

Several trading firms and utilities were verbally informed yesterday that multiple regional customs will still allow the unloading of Australian cargoes.But at the same time market participants told Argus that none of the awaiting Australian cargoes have been allowed to berth at Chinese ports today. It is unclear whether Chinese customs will actually clear these cargoes.

Market participants said the more flexible verbal tone regarding the unloading of Australian coal could probably be a result of Canberra's attempts to put pressure on the Chinese government to adhere to their free trade agreement. The Australian government approached China yesterday to seek more clarity over the disruption to its coal shipments, after many large importers were told by the Chinese government to stop buying Australian coal early this month.

Typical Chinese buyers of Australian coal remain on the market sidelines given uncertainty about Beijing's import policy. Several Chinese trading firms are considering reselling Australian cargoes they had booked and rerouting them to India. China's tightening curbs have knocked Australian coal prices, with Indian bids today as low as $35/t fob Newcastle for Panamax cargoes of NAR 5,500 kcal/kg coal.

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