THE country’s coal imports are set to slump in December as traders and utilities wind back purchases following signals from China that it will stop clearing shipments until next year, trading companies and utilities said. Coal imports by the world’s top consumer of the material used for power generation, heating and steelmaking rose in the first 10 months of 2018 to 252 million tons, up 11 percent from a year ago and not far below last year’s total of 279 million tons, according to official data. However, domestic coal prices have eased in recent months, even as China enters its peak demand season over winter, with utilities sitting on record coal stocks amid a slowdown in electricity demand growth. “Customs have tightened up imports because domestic supplies are abundant,” said Zhang Min, senior coal analyst with Sublime China. “We did not see the usual winter stocking activities from utilities because they have so much inventory.” China National Building Materials International (CNBM), a major buyer of Indonesian and Australian coal, will stop buying foreign supplies in December for its utility clients, a senior executive with the company said. International markets are taking note, with prices for Australian thermal coal cargoes for prompt loading from its Newcastle terminal falling this week below US$100 per ton for the first time since May. China has in the past imposed coal import restrictions, which has had the effect of increasing local prices by lowering competition. Earlier this year it banned smaller ports from receiving coal and has also carried out strict inspections on low-quality coal. Domestic thermal coal futures prices have fallen more than 5 percent so far in November, compared with an 8-percent gain in November last year, while domestic output has risen 5.4 percent in the first 10 months of the year to 2.9 billion tons. (SD-Agencies) |