Discharge of several Australian met coal shipments in China unlikely a change of policy: sources

New York — The recent discharge of several Australian coal vessels in northern China may have left some market participants hopeful that a change in policy is near, but Chinese steelmakers said the discharge did not mean that Australian coals will receive customs clearance and they will continue to steer away of Australian material in the near term.

Market participants said it was unclear why certain vessels carrying Australian met coals were allowed to discharge. Some alluded to the fact that the long waiting period at sea may have affected the welfare of the vessel crews.

On Feb. 5, five vessels carrying Australian coals, namely MV. PING MAY, MV NAVIOS CORAL, MV JAG ANAND, MV HONG KING and MV CHS CREATION, were heard to have been allowed to discharge at Jingtang port, despite the fact that no port clearance had been granted then, market sources said.

"It's good news only because it helps to save on demurrage fees, but it's nothing conclusive. I would not be considering Australian coals in the near term," a northeast China steelmaker said.

Another steelmaker located in the same region said there were no updates from his port authorities regarding the discharge of his Australian material and he had resorted to buying US coking coal prior to the Lunar New Year.

A Shandong-based steelmaker said his Australian coking coals were discharged in first-half 2020, but had not received clearance from authorities.

"Our procurement plans have shifted to buying domestic coals as no clearance was allowed. Furthermore, we do not see any positive signs on port-related policies," he said.

Market sources said port related restrictions remained status quo in South China -- Guangxi, Guangdong, Fujian, Zhejiang -- with limited policy updates despite the recent discharge of Australian coals at Jingtang port.

The discharge of coals at Chinese ports, however, may slow as Chinese steelmakers intend to re-sell their Australian cargoes to the rest of the world, as steelmakers await to hear from their port authorities.