China’s southern coal import region of Xinsha in Guangdong province has issued verbal notices to local shipping agents and traders to restrict seaborne thermal coal arriving after March 16 as the local import volume has exceeded the quota of 65 million mt, sources said.
“We received verbal notifications from Xinsha port in Guangdong province,” a southeastern China-based trader said.
The move comes after southeastern China hub Fuzhou in Fujian province and Guangdong province in the south implemented control measures last week.
The implementation of regulations could be adjusted upon further notice from Xinsha customs, local thermal coal sources told S&P Platts Global Friday.
Various local trading companies said they had received notifications from shipping agents Friday asking them to expedite the import process due to difficulties importing cargoes arriving after March 16 at Xinsha port.
A Shanghai-based trader said Xinsha port and neighbouring Huangpu port in Guangdong has a combined import quota of 20 million mt remaining in 2020 and the Australian coal market had bottomed out.
“Prices for 5,500 kcal/kg NAR Australian coal hovered at $53-$54/mt FOB today [Friday], touching the lowest trading price for this grade at $50/mt FOB,” he added.
Chinese domestic coal prices continued to drop amid subdued demand, although domestic futures surged on the day, market sources said.
May futures prices on the Zhengzhou Commodities Exchange were heard at Yuan 541.60/mt, up 3.60/mt on the day, market sources said.
Shipping impact
Market players said ships estimated to arrive after 16 March needed to sail to other ports for cargo declaration.
Freight rates on the Indonesia to South China route are under pressure amid a long ship queue at Xinsha.
“My ship has been waiting [to discharge coal] at Xinsha for over 20 days and the coal storage yard is full there due to the coronavirus outbreak,” a China-based Panamax operator said.
Representatives at the ports of Xinsha and Huangpu were not immediately available to comment.
Source: Platts