China:Chinese coking coal buyers were unfazed by Beijing’s slapping of an additional 25% import tariff on $16 billion worth of US products — including coking coal, coke and thermal coal — from August 23, given ample availability of alternative supplies.
According to Chinese market participants, there are several domestic metallurgical coal grades with similar specifications to US coal that can easily replace US coal once the import tariff is levied.
“US met coal qualities are not competitive, and domestic or Australian coking coal can easily replace US coal,” a major Chinese steelmaker said Monday.
Besides, the voyage time from the US East Coast to eastern China’s Qingdao is significantly longer at 40-45 days, compared to Australian coal which takes about 14 days from Hay Point to Qingdao.
Adding to this, Chinese buyers have been scaling back purchasing of US coal since June, on concerns over the escalating US-China trade tension when talks on the retaliatory tariff first emerged in mid-June.
“It is too risky to consider any US coal,” one buyer said.
Another major Chinese steelmaker which used to buy US coal has stopped seeking US coal since June.
“We are not interested in US coal, but other users in the market could be,” a source at the steelmaker said, adding that US coal prices need to be competitive, and that the seller has to absorb the additional 25% tariff before buyers will take up the offers.
