June 11, 2020 / 12:37 PM / a month ago

China curbs coal imports after 5 months of record inflows - sources

BEIJING (Reuters) - China has stepped up customs checks for coal imports, leading to lengthy processing delays at ports, four sources familiar with the matter said, as the country seeks to bolster the domestic coal industry.

FILE PHOTO: A coal-fired power plant is pictured near a construction site in Beijing, China, December 9, 2016. REUTERS/Jason Lee/File Photo

China is curbing coal arrivals through import quotas and quality restrictions on downstream users, such as utilities, following record imports for the first five months of the year.

As a result, imports can take up to 90 days to clear from roughly 30 days previously, two traders said on condition of anonymity.

Three coal traders said the backlog meant fewer import tenders from clients - mostly utilities in eastern and southern China.

“There are only sporadic cases reported on import denial at this moment. But the market consensus is that more ports may strictly implement the quota policy,” one of the traders said.

Authorities are seeking to support struggling domestic coal miners, and analysts expect imports to fall by as much as a quarter in the second half from the corresponding 2019 period.

Traders at Fuzhou and Guangzhou ports have reported processing delays and protracted document inspections at Fuzhou and Guangzhou ports.

Fuzhou port declined to comment and Guangzhou port could not be reached for comment.

“Due to the coronavirus pandemic and relevant coal policies this year, coal imports are more stringent across the country. Coal purchase has been greatly affected in our company as we do not have an import quota,” Jiangxi Xinyuan Fuel Corp, a coal trading subsidiary of government-backed State Power Investment Corp (SPIC), said in a statement on Tuesday this week.

A Fuzhou port official also said the general customs bureau had set import quotas on utilities and the port authority had denied entry for some shipments that did not conform to quotas.

“I don’t know how or when exactly the quotas were set, but they were lower than previous years and seemed insufficient,” said the official, who is not allowed to speak to media.

Fuzhou port would not allow mooring of a cargo chartered by a power utility that had exceeded its import quota of 1.2 million tonnes in 2020, the Fuzhou port official said. The company previously imported more than 2 million tonnes of coal annually.

The General Administration of Customs did not immediately respond to a request for comment.

China’s coal imports totalled 148.71 million tonnes in the January-May period, up 16.8% on year.

($1 = 7.0720 Chinese yuan renminbi)

Reporting by Muyu Xu and Gavin Maguire; additional reporting by Min Zhang and Beijing Newsroom; editing by Barbara Lewis

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