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Friday, June 22, 2018

Guangzhou Halts Foreign Coal Imports

Maritime Activity Reports, Inc.

September 6, 2017

File Image (CREDIT: AdobeStock / (c) Lidian Neeleman)

File Image (CREDIT: AdobeStock / (c) Lidian Neeleman)

Port handles 60 mln tonnes/year of foreign and domestic seaborne coal.
Guangzhou port, the largest coal transport hub in southern China, has halted foreign coal imports, according to traders who use the port and said they had been informed of the shutdown by customs authorities and senior company officials.
Traders said the move caught merchants using Guangzhou by surprise and interpreted it as a sign of Beijing stepping up its campaign to cut pollution caused by the burning of coal. China already banned coal imports at small ports in July but Guangzhou has 14 coal berths and can handle 60 million tonnes of shipments per year.
Chinese coal imports in the first seven months of 2017 totalled 110 million tonnes, an average of over 15.7 million tonnes a month.
"We were told by customs that the port has stopped accepting foreign shipments," said one trader. "Starting this week, we will avoid using the Guangzhou port."
It wasn't immediately clear how long the halt on imports would last, nor how many cargoes would be affected. Shipping data compiled by Thomson Reuters Eikon showed dozens of large dry-bulk ships anchoring in waters outside Guangzhou, waiting to offload.
Guangzhou port authorities and customs officials did not respond to requests for comment.
Another trader based at Guangzhou said his company has stopped booking supplies for October arrivals, despite increasing demand from utilities.
"We still have a couple cargoes each of 60,000 tonnes on the way to Guangzhou port. If these cargoes cannot clear customs we probably have to return them," the trader said.
"The last time I saw a foreign cargo being allowed to unload was almost a week ago," he said.
Settlement prices at the port for Indonesian imports have jumped 40 yuan per tonne since September 1 to 560 yuan ($85.84) per tonne, market sources said.
Settlement prices of Indonesian imports have jumped 40 yuan per tonne since September 1 to 560 yuan ($85.84) per tonne.
Because of the ban, a Ningbo-based trader who imports Australian and Indonesian coal said she had started diverting cargoes to other southern China ports such as the Xiamen port in Fujian province.
"We had expected a jump in demand for foreign supplies at the beginning this year," she said, referring to domestic coal mining caps put in place in 2016.
"The latest tightening import policies have ... forced us to look at domestic coal again" she said.
The closure is the latest in a series of policy measures undertaken in the coal sector that has stirred up markets domestically and internationally.
Earlier this week, power utilities in northern China warned of winter supply shortages after the government closed down two coal mines in Inner Mongolia.
Mining caps and closures last year resulted in huge rises in coal prices which took many in the market by surprise.
China's coal production in July fell 4.5 percent to 294 million tonnes, the lowest level since October 2016. Coal imports in July also fell, to a five-month low, despite increasing signs of tightness in the market.

Reporting by Meng Meng and Henning Gloystein 

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