London — The Turkish government is expected to impose a 5% tariff on US coal and a4% tariff on US petcoke after a decision reached Friday, according to adocument seen by S&P Global Platts.
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The coal tariff is lower than the 10% level that had been discussed asrecent as Thursday, but still would make buying US coal more difficult forfinancially strapped Turkish end users, trade sources said.
One trade source said he believed "no tariff would have been better" forutility buyers, who have been fighting against depreciation of the Turkishlira for several months now and are looking for energy savings.
A utility buyer said he would like to see Turkish-delivered coal pricesdrop about $20/mt from current levels, currently hovering around $100-$101/mt.
On the supply side, a producer source said he was "surprised that the taxwent ahead at 5%."
"If it's only 5%, then that is a major let-off for [US buyers]," he said.
Traders at the Mediterranean Solid Fuels conference in Lisbon werekeeping an eye out for an official confirmation of the tariff increase, butnone had been made at around 1200 GMT.
Turkish president Tayyip Erdogan was believed to have made the decisionto go with the lower tariff ahead of Sunday's snap elections as a nod toutility buyers, who potentially could benefit from increased purchases of UScoal.
Turkey is still weighing the lifting of its current sulfur cap to 3%,which would effectively allow US high sulfur coals from the Illinois Basin andNorthern Appalachia into Turkey. In 2017, Turkey imported roughly 33 millionmt of thermal coal, including 51% from Colombia and a negligible amount fromthe US. US petcoke exports to Turkey totaled 3.57 million mt in 2017, up from3.5 million mt the previous year.
A decision on raising the coal sulfur cap to allow more US coals could beimplemented as early as next year.
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