Coal news and updates

China coal imports plunge 37.5pc as economy struggles

China's coal imports declined 37.5 per cent over the first six months of the year, in apparent confirmation that "quality restrictions" were being used as a protection measure for the struggling local industry.

Data released by China's Customs Bureau on Monday showed the country imported 99.87 million tonnes of coal in the first six months of the year.

On a monthly basis, imports rose slightly in June to 16.6 million tonnes from May, but this was still below the average monthly level for 2015.

Iron ore imports rose 5.7 per cent on a monthly basis in June, as higher cost domestic producers shut down and were replaced by cheaper imports from Australia and Brazil.

The value of China's overall trade fell 6.9 per cent in the first half of the year, due to a dramatic slide in imports.

Imports were down 15.5 per cent in the first half, while exports increased by 0.9 per cent.

The falling value of imports is partly due to lower prices for oil, iron ore and other commodities, but also reflects broader weakness in the Chinese economy.

"China's economy is facing downward pressure," said Huang Songping, a spokesman for China's Customs Bureau.

ANZ is forecasting China's second quarter GDP to drop below 7 per cent for the first time in six years when the data is released on Wednesday.

The Australian Financial Review reported on July 1 that Australian cargos of coal had been turned away from Chinese ports in recent months after failing to pass the country's new quality tests.

Greg Evans, chief executive of the Minerals Council of Australia, said he is concerned the same quality standards are not being applied to local and imported coal.

"We would be concerned if the quality criteria was not applied to Chinese domestic coal in order to help local producers, as this would breach trade rules," he said.

China is the world's biggest coal market, but usage has fallen in recent years after the government imposed tougher environmental regulations on power producers and steel mills.

Over the first five months of this year, China's coal consumption fell 8 per cent, compared to the same time in 2014.

Australian coal producers are not only battling the slowdown in China but the imposition of an import tariff of between 3 per cent and 6 per cent since October last year.This will be gradually abolished once the China Australia Free Trade Agreement comes into effect early next year.

source: http://www.afr.com