Friday, June 9, 2023
HomeHeadlinesChina removes import tariffs on various coal grades to secure supplies


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

China removes import tariffs on various coal grades to secure supplies

China has removed import tariffs on various coal grades as part of its efforts to maintain adequate supplies amid global disruption caused by the Russia-Ukraine conflict, according to a government document seen by S&P Global Commodity Insights April 28.

The tax cut will be effective from May 1, 2022 till March 31, 2023, the document read.

The tariff has been reduced to zero from 3% earlier for unformed anthracite, coking coal, unformed lignite and briquette lignite, according to the document.

Tariffs for other bituminous coal, other unbridged coal and similar solid fuels made from coal have been reduced to zero as well from 6%, 5% and 5%, respectively.

“I think this is a bold move, mainly to secure more coal from Russia which is in decent discounts. But as far as prices are concerned, they will likely remain high given the volatility in the markets across the world,” an India-based trader said.

The Chinese government’s decision to slash import tariffs comes amid an upheaval in global coal trade after Russia invaded Ukraine in February, following which the European Union and Japan imposed a ban on Russian coal in April. This has led to a surge in coal prices of other origins such as Australia, Indonesia, the US, South Africa and Columbia due to additional demand from the EU.

“The document says the rule is about HS codes, so it is applicable to all origins,” a South Korea-based source said. “This should help Russian coal demand more than other origins because it is already at a discount to other origins.”

Some market participants said the move may weigh on domestic coal prices as imported coal would become cheaper.

Chinese demand for imported coal had weakened over the last few weeks as power consumption fell amid pandemic-related lockdowns.

China’s government had also imposed a price cap on domestic 5,500 kcal/kg NAR coal price at Yuan 550-770/mt, which is to be implemented from May 1. Traders anticipated that domestic coal prices would fall and had refrained from purchasing in the seaborne coal market.

“The removal of tariff should ideally boost imports, but since domestic production is also robust, and with COVID-19 restrictions, we will have to wait and see how this impacts the market,” an Indonesia-based trader said.

The domestic 5,500 kcal/kg NAR price was around Yuan 1,100-Yuan 1,200/mt on April 27, according to market sources.

In the metallurgical coal market, the outlook was mixed, with some expecting limited impact given the current wide domestic-seaborne spread at $50.06/mt April 27, while others said the cost savings from the removal of import tariff would not be sufficient to entice more buying interest in the near term.

Some sources said that the seaborne sellers might be able to offer at a higher level with the removal of the tariff, adding that this might improve liquidity of non-Australian coking coals into China.

Source: Platts

Related Posts


Finance & Economy
Shipping News

Trafigura publishes 2023 interim results showing a strong performance

Trafigura, a market leader in the global commodities industry, released its 2023 Interim Report today for the six-month period ended 31 March 2023. The results...

Globus Q1 results hit by weak dry bulk market

Globus Maritime Limited, a dry bulk shipping company, reported its unaudited consolidated operating and financial results for the quarter ended March 31, 2023. Revenue $8.6 million...

BW LPG appoints new CFO

BW LPG announced that it has appointed Ms Samantha Xu as Chief Financial Officer (CFO), effective 1 September 2023. Ms Xu has over 20 years...

Frontline Posts Highest First Quarter Results Since 2008

Frontline plc reported unaudited results for the three months ended March 31, 2023: Highlights Highest first quarter profit since 2008 of $199.6 million, or $0.90 per...

Diana Shipping posts slightly lower Q1 profit; takes out $123m in loans

Diana Shipping reported net income of $22.7 million and net income attributed to common stockholders of $21.3 million for the first quarter of 2023....

Celestyal Participates In Promotion Of The Tourist Destination Of Central Macedonia

Celestyal, the award-winning, number one choice for travellers to the Greek Islands and the...

Capesize, panamax gains drive Baltic index higher

The Baltic Exchange’s main sea freight index rose for a fourth straight session on...

Baltic rises to over 3-month peak on firm demand for larger vessels

The Baltic Exchange’s main sea freight index rose on Wednesday to scale its highest...

Baltic index logs best day in nearly 3 months

The Baltic Exchange’s main sea freight index posted its biggest single-day gain since mid-March...

Taiwan Shipping Firms Set to Hand Out Bumper Bonuses Again

Taiwanese shipping companies are handing out bumper mid-year bonuses despite a slump in global...

Iraklio port tender set for another delay

The opening of the binding financial offers for 67% of Iraklio Port Authority had been scheduled for Thursday, but this is no longer expected...

APM Terminals extends concession of Kalundborg container terminal

APM Terminals has reached an agreement with the Port of Kalundborg to extend the concession of Kalundborg container terminal by 10 years to 2033. In...

US West Coast port workers shut terminals in showdown over pay

The employers of more than 22,000 dock workers at U.S. West Coast seaports on Friday said the union representing those laborers “is staging concerted...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...