Source : https://www.argusmedia.com/en/news/2202405-chinas-huangpu-customs-puts-limit-on-coal-imports?backToResults=true
Customs authorities in Huangpu, south China have put a quarterly limit on coal imports, a move that is likely to curb the country's seaborne coal demand and could weigh on prices, market participants said.
Huangpu, in the southern province of Guangdong, is one of the country's biggest customs administrations that accepts imported coal. Authorities have set a limit of around 3mn t for coal imports in April-June, according to market participants.
The limit was abruptly introduced after imports in January-March reached 6mn-7mn t, significantly more than in the same period last year. The Chinese government typically seeks to cap annual coal imports at levels no higher than the previous year.
Imports may not be affected this month, but the quota for the quarter could be exhausted by mid-May, a Guangdong-based trader said.
Quotas for the whole of 2021 will be around 17mn-21mn t, according to market estimates, although an exact figure has not yet been decided.
The rise in imports to Huangpu in January-March came despite a decline in China's total receipts early this year. China imported 34.14mn t of thermal coal in January-February, down by 34pc compared with the same months last year, customs data show.
Huangpu is the first customs authority to reimpose quotas after Beijing temporarily lifted import restrictions in December 2020 to cope with a severe shortage in the domestic market.
The move has so far had no obvious impact on seaborne coal prices, as Huangpu is currently the only customs authority that is imposing curbs on imported coal. Offers for Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) coal increased to more than $46/t fob Kalimantan yesterday for May-loading Supramax cargoes, up from the last Argus assessment of $43.94/t fob Kalimantan on 1 April. Indonesia is the biggest thermal coal supplier to China.
Chinese domestic coal prices could be supported if the restrictions are expanded to cover other ports, given supply from major Chinese coal-producing regions and provinces is already tight. The price of domestic NAR 5,500 kcal/kg coal rose to 736.67 yuan/t ($112.32/t) fob Qinhuangdao on 1 April, the highest since 4 February, according to Argus assessments.
The price outlook is unclear because of a mixed impact from an expected rise in hydropower output and continuing railway maintenance. Hydropower typically increases in April with the onset of rainy weather, which could weigh on coal consumption for power generation. But regular maintenance on the major coal-transporting Daqin railway from 6-30 April could tighten coal supplies at ports in north China.
Stocks at the major coal transshipment port of Qinhuangdao in north China were at 4.51mn t yesterday, down by 300,000t on the week, according to data compiled by coal industry association the CCTD.