Wednesday 27th Sep, 2017

Chinese ports could be slowing coal trade

Coal. Photo: Shutterstock.
Photo: Shutterstock.

Southern China’s largest port is denying reports it has placed “unofficial” restrictions on coal imports in a government-sanctioned effort to support local industry.

According to the AFR, analysts and traders have confirmed the Port of Guangzhou is placing restrictions on coal imports, designed to slow down the trade and improve the competitiveness of local miners.

The port has denied the allegations.

But traders reportedly say the unofficial policy, which would violate several of Beijing’s trade deals, is clearly forcing local power producers to buy local coal.

“It’s pretty sensitive, as you can imagine,” an anonymous trader was quoted as saying. “And it’s not just happening in Guangzhou but right up the coast … ports have been given unofficial import quotas.”

Ports have reportedly been ordered to ‘slow the whole system down’ to generate additional costs to imported coal.

“The industry is experiencing longer vessel queues, resulting in more demurrage costs,” one miner representative reportedly said.

“[There are] suggestions the Chinese Government is trying to increase the cost of imported coal, in order to increase the competitive advantage for domestic coal.”