China's Guangxi further restricts coal imports as quota running low: traders

Singapore — China's southern coal import region of Guangxi further restricted coal imports, this time targeting local utilities that are competing for the limited amount of quota left for the year, several traders affected told S&P Global Platts Wednesday.

Several local utilities were competing for the remaining local import quota, which puts Guangxi custom and China's Ministry of Industry and Information Technology in a difficult spot deciding how to split it up, market sources said. At least six shipments of seaborne coal have been waiting to berth at Qinzhou and Fangcheng ports since March 18 to March 29, market sources said. At least two of them were intended for local utilities, two traders in China said.

"The remaining shipments were either supplying to trading companies or utilities outside of Guangxi," a southeastern China-based trader said.

The ministry, along with Guangxi customs and the ports of Fangcheng, Qinzhou and Xinsha were not immediately available to comment.

All parties "need to balance coal demand between various local end-users," a southeastern China-based trader said.

Coal import hubs in southeastern and southern China have already implemented restrictions, mainly targeting traders without local quota in March.

About three shipments of seaborne coal supplying Guangxi end-users were diverted to Xinsha port this week but they were rejected because Xinsha's import quota was already used up in mid-March, a Shanghai-based trader said.

"This affects all seaborne coal including but not limited to Indonesian coal and Australian coal," a south China-based trader said.

High-ash coal

Measures to tighten imports in China and difficulties of custom declaration at Guangzhou, Xinsha and Fangcheng ports in southern China capped buying interest for high-ash Australian coal this week, market sources in China said.

"I could not declare high-ash Australian coal at several southern China's customs, hence no longer bidding for this grade," a south China-based trader.

"I do not want to risk importing Australian coal for narrowing margin and suffered from the troubles of custom declaration," a south China-based trader said.

More Chinese ports are running low on import quotas, so traders said they expect tightening conditions to spread.