Ships laden with Australian coal are continuing to experience extended waiting times and discharge delays at Chinese ports as China prepares to start its May Day holidays later this week, industry sources said Tuesday.
An east China-based trader noted that with the week-long May Day holiday starting on Wednesday, coal vessels are expected to be delayed for an even longer period as unloading is not allowed during public holidays.
The holiday in China will start on Wednesday, right up till Saturday, according to a Chinese government website.
S&P Global Platts cFlow vessel tracking software has identified nine ships carrying cargoes of Australian coal loaded from ports including Abbot Point, Dalrymple Bay, and Newcastle, that are currently stationary off ports in eastern and southern China.
Beijing’s import restrictions on cargoes of this origin is entering its third successive month, after China quietly imposed tighter restrictions for Australian coal cargoes, including protracted customs clearance times of one to two months, in early-March.
“There was talk that [import] policies might change after the Australian Federal election on May 18, but we don’t see any signs of the policies easing yet, and it probably also depends on the new government’s attitude towards China,” the east China-based trader said.
Market sources had speculated that the import curbs on Australian coal cargoes were put in place as a result of strained bilateral ties between Australia and China, but officials from both countries had dismissed such views.
Before the import curbs were imposed, the process of unloading for customs clearance took about 20 days. However, the delays have been extended to about 40 days, to as long as even two months, depending on the discharge ports, China-based market sources said.
The long delays had put off procurement of Australian coal, but some buying interest has returned this week as traders take advantage of lower Australian coal prices.
However, the spread between the price of Australian high-ash 5,500 kcal/kg NAR grade and that of domestic Chinese thermal coal was seen narrowing since last week.
On Monday, S&P Global Platts had assessed this grade of Australian thermal coal at Yuan 530/mt CFR China, while domestic 5,500 kcal/kg NAR cargoes were assessed as Yuan 617/mt FOB Qinhuangdao. Both assessments include Chinese value added tax of 13%.
CFR China thermal coal was assessed at Yuan 487/mt on April 1, while domestic spot thermal coal was assessed at Yuan 622/mt FOB on the same day, Platts data showed.
Among the nine Australian cargoes stationary off ports in eastern and southern China, are two ships filled with Australian coal off China’s southern coast in the Gulf of Tonkin, that were both bound for Fangcheng port, cflow showed.
They were the 169,000-dwt Battersea a Capesize vessel that loaded its Newcastle cargo on April 3, and which had its arrival date of April 23 for Fangcheng port pushed back to April 30, and the 180,000-dwt Tiger Guangdong ship from Gladstone port that had missed its initial April 21 arrival date at Fangcheng port.
Another stationary Australian coal ship off China’s southern coast was the 176,000-dwt Alpha Dignity from Abbot Point that was four days overdue as its arrival date for Xiamen port was April 26.
Two Australian coal cargo ships were held in the Hong Kong regional queue for China on Tuesday — the 76,000-dwt Guo Yuan 18 that sailed from Dalrymple Bay terminal on April 12, with an April 26 arrival date for Guangdong port that had been rescheduled to April 30, and the 84,000-dwt Taho Europe that left Abbot Point on April 7.
Marvellous, a 169,000-dwt Capesize ship that loaded its cargo at Newcastle on April 7 destined for Zhanjiang in south China on April 24 has been at anchor off the Chinese port since April 24.
Another ship laden with Australian coal from Dalrymple Bay terminal, the 81,000-dwt Shun Ying that had sailed on April 2, was berthed at Zhanjiang port on Monday. However, it had arrived after its original docking date of April 18.
Source: S&P Global Platts