Global Markets: Chinese coal imports rise in Dec on looser customs curbs

Vale Nacala Coal Terminal (illustration)

BEIJING – China’s coal imports rose in December from the previous month, as Beijing loosened curbs on shipments brought in through some ports to ease supply shortages of the fuel. 

Arrivals of coal, which include lignite, reached 22.74-million tonnes last month, up from 22.05-million tonnes in November, the General Administration of Customs said on Friday.

The world’s largest coal consumer imported 270.9-million tonnes of the commodity over the whole of 2017, up 6.1% from 2016 and the highest level since 2014, customs data showed.

Beijing in late November verbally notified customs authorities that they should ease restrictions on coal imports by quickening the customs clearing process in some ports, trade and utilities sources said.

The restrictions had been imposed in July as part of a campaign against pollution, but were wound back when some coal-fired power plants in the north of the country ran short of fuel after the winter heating season began.

The most-traded coal futures on the Zhengzhou Commodity Exchange jumped more than 10% from early November to touch a record 645.4 yuan ($99.57) a tonne on December 18.

“Despite Beijing’s reiterated orders on releasing coal capacity, domestic supplies remain insufficient to meet demand at utilities and industrial plants during the peak period in winter,” said Zhang Xiaojin, coal analyst at Everbright Futures.

Since October, China’s state planner has approved new coalcapacity totalling 42 million tonnes in a bid to ease concerns about fuel shortages.

The Ministry of Environmental Protection (MEP) has also scaled back a plan to convert northern cities to gas this winter, while coal burning has been allowed to resume in some residential households and for some power projects.

“It is still unclear how long the easier customs restrictions will last, but one thing for sure is that total coal imports in 2018 will decline as China strives to curb coal- use to improve its air quality,” said Zhang.

“But we expect total coal demand in China in 2018 may stand at the same level as in 2017.” EDITED BY: REUTERS

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