Singapore : Customs officials for the Fuzhou port in China’s southeastern Fujian region said only coal end-users such as local steel mills or power plants will be able to obtain customs clearance for imported coal, according to market sources Thursday.
Hence, coal imports without the backing of local end-users could be refused customs clearance at Fuzhou, market sources said.
“This signals to me the start of coal import restrictions, and just like last year, there will not be any official documentation,” a southeastern China-based trader added.
“This seems to be a warning to Chinese imports and the demand from China will now reduce,” an Australia-based miner said.
Fuzhou customs officials did not disclose the amount of seaborne-traded thermal coal that end-users will be able to import into the port, said various southeastern China-based sources.
Sources added that more coal imports were being declared to customs authorities away from the home district of the end-users.
“This happens more often at eastern China customs,” a southeastern China-based trader said.
POSSIBLE IMPACT
Some traders suggested the new customs regulation may not have a significant effect as a large proportion of coal imported at Fuzhou is for the local end-users.
But other market sources said the new customs regulation will be impactful.
“China will need Indonesian low-calorific value thermal coal which they can hardly get from other markets,” said an Indonesia-based producer.
Power plants will be worried as they have yet to call for tenders for low-calorific value thermal coal for the second half of August, a Singapore-based trader said.
Another trader said healthy stockpiles of seaborne coal at Chinese power utilities and high stocks of Chinese domestic coal at northern ports will be sufficient for end-users’ summer requirements.
“Major power plants must have learnt from their mistakes last year and are able to manage the blend by utilizing more high-calorific value Chinese thermal coal,” he added.
Some Indonesia-based miners said they would like to act only when they get a fuller picture of the customs situation in China.
An India-based trader said the new customs regulation could keep offers for Kalimantan thermal coal in check.
“Some force majeure have been called off too, so supply should be less tight,” he said.
After hearing the news of more stringent checks for Chinese imports, the market could remain soft for awhile, he added.
“China will need Indonesian low-calorific value thermal coal which they can hardly get from other markets,” said an Indonesia-based producer.
