China tightens import curbs on Australian coking coal

Customs officials at the major Chinese coking coal ports of Caofeidian and Jingtang have clamped down on customs clearances for Australian coking coal again, only granting customs clearances to Chinese importers on a case by base basis.

This sudden tightening of coal import policy has come less than one month since the rules governing customs clearance at the two ports were loosened at the beginning of 2020.

Importers in other regions of China are disallowed from declaring their coal cargoes at the two ports with immediate effect, said sources who received the notice.

As usual for Chinese customs authorities, this new policy has been implemented only "in principle" and coal buyers have stressed that the situation on the ground will be unclear until more updates are available.

"Given that we are hearing of policies being tightened so much earlier in the year, it is quite clear that the coal import policy this year could be much stricter than that of last year," a Beijing-based trader said. In contrast, Chinese import policies only started to tighten around February in 2019.

But China's new agreement to increase imports of various US commodities, including thermal and coking coal, as part of a "phase one" trade deal signed in Washington yesterday could provide some relief to Chinese steelmakers that are seeing Australian coking coal imports targeted for additional limits.

Although details of the US-China trade deal have not been finalised, Chinese steel producers are hoping for the removal of the 29pc tariff placed on US coal.

"Chinese buyers would be more than happy to import Buchanan and Blue Creek No. 4 again should the tariffs be removed," said a US coal buyer in China. "After all, it does mean more choices for us with the policies on Australian coal unlikely to change significantly in the long term."

Chinese imports of US coking coal have fallen sharply since the coal tariffs were first implemented in August 2018. China imported 1.12mn t of US coking coal from January-November in 2019, down from 1.98mn t over the same period in 2018 and 2.3mn t in 2017.

By Rou Urn Lee