CHINA is ramping up controls on imports of low-quality coal due to concerns about smog and overcapacity in the world’s top coal consumer, a government official said yesterday, as traders report some cargoes have been delayed by customs checks.

    “As long as coal meets standards, we don’t forbid imports, but we are imposing controls on low-quality coal imports,” said Zhi Shuping, head of the Administration of Quality Supervision, Inspection and Quarantine which oversees imports safety.

    “If we let all kinds of coal import into domestic market, it will hit the domestic market,” Zhi said, speaking on the sidelines of the annual meeting of China’s parliament.

    Sustained checks will unsettle global miners and traders who have enjoyed months of a coal buying spree by China that helped propel prices to multi-year highs, bringing the industry out of a prolonged bear market. Prices have soared to multi-year highs this week amid broader concerns about tighter supplies and robust demand.

    Delays in processing imports could further constrain supply, sending domestic prices higher. That could have the effect of undermining government efforts to keep prices stable as the government seeks to close outdated mines, increase use of cleaner, renewable fuels and make bloated heavy industry more efficient.

    Zhi’s comments come as some international traders have complained about delays running into weeks in getting some cargoes cleared through customs in China due to tougher inspections for sulphur and mercury content at ports. Last year, Zhi’s agency rejected 1.5 million tons of imported coal, he said — less than 1 percent of China’s total coal imports.

    One official at a global merchant, speaking on condition of anonymity, said his company’s shipments into Jiangsu Province took longer than usual to get customs clearance.

    It’s not clear how widespread the checks are and Zhi did not say when the crackdown started. Some experts said it could be linked to the two-week annual meeting of China’s parliament, which ends yesterday.

    Last week, a senior politician from Shanxi, one of the country’s top producing regions, proposed curbing imports of low-quality coal as a radical measure for curing China’s overcapacity problem.

    Speaking on the sidelines of parliament, Wang Fu, vice governor of the province, suggested targeting coal from Indonesia, which accounted for almost 40 million tons, or 15 percent of total arrivals, last year.

    The proposal is unlikely to get passed into law and would likely face hefty resistance from power producers, which still rely on coal. But the comment underlines the challenge of getting wary provincial governments on board to tackle excess and close inefficient operations.

    (SD-Agencies)

    Govt. vows new steel, coal capacity cuts

    CHINA will cut steel capacity by 50 million tons and coal output by 150 million tons this year, its top economic planner said Sunday as the world’s No. 2 economy deepens efforts to tackle pollution and curb excess supply.

    In a work report at the opening of the annual meeting of parliament, the National Development and Reform Commission (NDRC) said it would shut or stop construction of coal-fired power plants with capacity of more than 50 million kilowatts.

    The pledges are part of the government’s years-long push to reduce the share of coal in its energy mix to cut pollution that has choked northern cities and to meet climate-change goals while streamlining unwieldy and over-supplied smoke-stack industries such as steel.

    Speaking at the opening of parliament Sunday, Premier Li Keqiang reiterated the government’s plan to ramp up monitoring of heavy industry and crack down on companies and officials that violate air quality rules.

    In its report, the NDRC said it would cut energy consumption per unit of gross domestic product by 3.4 percent and curb carbon intensity by 4 percent this year.

    By 2020, the government has said it aims to close 100 million-150 million tons of steel capacity and 800 million tons of outdated coal capacity.

    This year’s targets come after the world’s top coal consumer and steel maker far exceeded its 2016 goals to eliminate 250 million tons of coal and 45 million tons of steel capacity.

    Much of the steel capacity was already idled and output actually rose 1.2 percent to 808.4 million tons. Coal output fell 9 percent to 3.64 billion tons.

    A new round of capacity cuts was widely expected, although some executives may be disappointed the NDRC did not give an update on the government’s policy that sets a limit on the number of days thermal coal mines can operate each year.(SD-Agencies)