China imported 21.6 million mt of coal in June, including lignite, thermal and metallurgical material, down 2.66% from May and a marginal 0.68% lower year on year, according to preliminary data released Thursday by the General Administration of Customs.
China imported 22.19 million mt of coal in May this year. In June 2016, the country imported 21.75 million mt of coal.
“Total coal imports weakened slightly by 2.7% month on month and 0.7% year on year as crackdown on low-rank thermal coal imports may have kept Indonesian volumes away,” Citi analysts said in a note.
The analysts said they expected Chinese custom controls over low-rank thermal coal to put pressure on July and August volumes too.
“However, importers could eventually adapt to these policy changes by purchasing more high-rank products,” the analysts added.
Last month, China implemented a partial embargo on cargoes of imported thermal coal, with about nine tier-2 ports on China’s eastern and southern coasts getting affected. Traders had estimated the potential impact on China’s import market at 7 million-10 million mt in the second half of 2017.
Supply in the Chinese market remained fairly tight due to high thermal power generation and slow growth of domestic coal output, Citi analysts said.
Total imports over January-May rose 23.5% year on year to 133.26 million mt.
Citi analysts said that they expected Chinese coal imports to maintain the momentum seen in H1 2017 and end the year with double-digit growth.
China exported 0.73 million mt of coal in June, up 10.61% year on year, the data showed.
China exported 1.31 million mt of coal in May this year. In June 2016, the country exported 0.66 million mt of coal.
Exports over January-May were up 15.1% year on year at 5.38 million mt.
The GAC did not give a breakdown of the imports and exports in June, which will be available later this month.