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Chinese thermal coal market cautious after prices surge

Coal News - Published on Thu, 14 Mar 2019

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Platts reported that sentiment in the Chinese thermal coal market has turned cautious as demand starts to weaken after a surge in domestic and Indonesian prices since January. The Asian seaborne thermal coal market started 2019 with a bang when demand for Indonesian low CV coal ramped up and Chinese domestic prices rebounded strongly. There are several factors at play here, including the resetting of the annual import quota, China's stringent mine checks, India keeping coal for domestic use to ensure stable power supply in the run-up to elections in April-May, as well as import restrictions on Australian coal. While the issue of stricter import restrictions weighed on market participants' minds just last December, this seems to be a non-issue right now due to the import curbs on Australian coal.

A China-based trader said that "It's still beginning of the year, so the total import volume is still low right now, and the authorities will not restrict imports all at the same time."

The restrictions on total import volume were put in place late last year as China tried to rein in imports. China had aimed to maintain its 2018 total import volume for all types of coal at the same level as 2017, 271 million mt.

Market sources said loading and custom clearance had been smoother at beginning of January, but shortly afterward delays were reported for cargoes from Australia. Political tensions had been blamed for the import curbs on Australian coal, but government officials have dismissed this, saying checks were being conducted for environmental reasons.

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Posted By : Rabi Wangkhem on Thu, 14 Mar 2019
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