Singapore — Ports in Guangxi in southern China and Jingtang port have halted custom declarations for all coal imports effective Monday, close on the heels of similar curbs at a northern port, stoking fears of wider restrictions for imported coal, market sources said Thursday.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Authorities in Pingguo county in Guangxi province issued a notice to temporarily halt the import process for all seaborne coal as the import volume was reaching a cap, sources added.
The import process includes unloading and custom clearance, said sources quoting the notice.
Ports at Qinzhou, Fangcheng and Beihai in Guangxi are said to be affected. Qinzhou and Fangcheng are two major thermal coal ports in the province.
Jingtang port in North China is said to have issued import curbs for seaborne coal following a similar verbal notice from Caofeidian port authorities a day earlier.
Authorities at Jingtang port verbally notified trading houses earlier this week that customs declarations will be stopped for coal imports with immediate effect, sources said.
End-users, however, are still allowed to negotiate for custom clearance based on individual shipments.
The move is being seen by the market as a signal that the country is tightening its grip on coal imports.
The measure was imposed after the total volume of coal imported over the first half of 2019 was deemed by authorities to be greater than desired, sources said. China imported around 154 million mt of coal over January-June, including thermal and metallurgical coal, up 6.4% year on year, latest customs data showed.
Some market sources said they were caught by surprise at the early notice compared to last year.
"This is crazy early," a Singapore-based trader said, adding that a China-based trader is looking to replace the previously committed Australian cargoes to cargoes from other origins.
A southeastern China-based trader said he was feeling nervous about the unexpected news and would temporarily stay on the sidelines.
"It is hard to do seaborne coal now and I expect seaborne coal price to soften further due to political uncertainty," he added.
Chinese traders were also on the sidelines when it came to the Indonesian market, due to the recent notices, a Singapore-based trader said. "So far, our China bidder has gone silent," he added.
-- Hui Min Lee, email@example.com
-- Jenny Ma, firstname.lastname@example.org
-- Edited by Shashwat Pradhan, email@example.com