China’s imports of U.S. coking coal rose more than five times in April from a month earlier, customs data showed, on traders’ earlier bets that trade tensions between Beijing and Washington were easing.
Shipments of coking coal from the United States rose to 308,789 tonnes last month, up from 60,585 tonnes in March, according to data released by the General Administration of Customs over the weekend.
The U.S. imports were also up more than 130% from 133,315 tonnes in April of last year.
“There is quite a lot of U.S. coking coal still sitting in bonded warehouses and ports … Nobody wants to buy it due to high tariffs and poor quality,” said a coking coal trader based in the port of Jintang in China’s northern province of Hebei.
China imposed imports tariffs of 25% on $34 billion in U.S. goods effective from July of last year, including on thermal coal and coking coal, in response to U.S. tariffs on Chinese goods.
Vessel-tracking and port data compiled by Refinitiv show that nearly half of the U.S. coal brought into China in April was discharged at Jintang port.
It typically takes around six weeks for U.S. coking coal to arrive in China and some extra days for customs clearance. That means the April import data reflects U.S. vessels departing in February and early March, when the world’s two largest economies seemed close to reaching a trade deal.
“The U.S. coal at ports were brought in by traders, who bet the trade war would wind down and Chinese users would be encouraged to make purchases,” said the coal trader in Jintang.
The two countries, however, started slapping new tariffs on each other’s goods after the Trump administration in early May said China had reneged on commitments it had made previously.
“U.S. coking coal does not have competitiveness compared to its equivalents in China and Australia due to high sulphur content,” said Gu Meng, senior analyst at Orient Futures, adding that Chinese buyers would not proactively buy U.S. coal right now, especially given the uncertainty of the trade situation.
Refinitiv data shows no cargo carrying coal has been departed from the United States for China since April 2.
China’s imports of Australian coking coal, meanwhile, continued to increase in April despite persistent prolonged customs clearance times at Chinese ports, supported by cheaper prices and firm demand from the country’s steel mills.
Arrivals of Australian coking coal were at 2.72 million tonnes in April, up from 2.23 million tonnes in March, according to customs data.
“It’s hard to find a berth to unload Australian coal because those that arrived earlier remain stuck at customs, and new arrivals have to wait,” said a Beijing-based coking coal trader.
China imported a total of 7.43 million tonnes coking coal in April, up 21% from March and 64% from same month last year.
View article here.
- On May 28, 2019