COKING COAL DAILY: Import restrictions resurface at Chinese ports

Coal import restrictions have emerged at the ports of Jingtang and Caofeidian in China, two key entry points for seaborne coking coal to the country’s steelmaking hub of Tangshan, sources told Fastmarkets on Thursday January 16.

Fastmarkets indices
Premium hard coking coal, fob DBCT: $155.26 per tonne, unchanged
Premium hard coking coal, cfr Jingtang: $160.87 per tonne, unchanged
Hard coking coal, fob DBCT: $127.01 per tonne, up $2 per tonne
Hard coking coal, cfr Jingtang: $140.82 per tonne, up $5.06 per tonne
Low-vol PCI, fob DBCT: $87.15 per tonne, unchanged
Low-vol PCI, cfr Jingtang: $99 per tonne, unchanged

“Only Tangshan-based buyers can declare customs at the ports of Jingtang and Caofeidian for imported cargoes,” a buyer source in China said.

A trading source corroborated this, though he added that it was not clear whether any restrictions on the import of seaborne coal had been imposed on traders such as himself.

China typically applies ad-hoc restrictions on coal imports to keep volumes from increasing too much in comparison with previous years. Such measures at the same time stimulate demand for domestic coal.

For last year, these import restrictions were applied at varying levels of severity, starting in January and intensifying in July. While the former affected only Australian coal, the latter applied to all coal imports.

This time, across-the-board import hurdles have surfaced even before the first month of the year is over.

Import restrictions could make buyers more selective with their purchases, and favor higher-quality materials.

They could also weigh on seaborne prices if sellers become more eager to liquidate their cargoes as soon as possible on expectations that Chinese demand for seaborne coking coal would fall.

On Thursday, sources could not say how the latest restrictions would affect the market since word about them had only just emerged.

Meanwhile, prices for seaborne second-tier coking coal picked up some strength. An end user in China bought a top-quality cargo in that tier at around $140-141 per tonne cfr China.

Liquidity in this segment had dwindled over the past year amid operational disruptions experienced by producers of such products in Australia.

China’s import restrictions last year also made such cargoes less attractive for buyers in the country.

Dalian Commodity Exchange
The most-traded May coking coal futures contract closed at 1,224.50 yuan ($178), up 13.50 yuan per tonne.

The most-traded May coke futures contract closed at 1,857.50 yuan per tonne, up 5 yuan per tonne.