Coal news and updates

Lower acceptable levels after July 1 for trace chemicals in thermal coal imported to China such as chlorine and phosphorus will have a negligible impact on Australia's export thermal coal trade with China, said market sources Tuesday.

 

Chinese authorities plan to drop portside tests for fluorine levels in imported coal cargoes from mid-year, currently capped at 200 millionths of a gram.

 

At the same time Beijing intends to lower the acceptable thresholds for arsenic, chlorine and phosphorus in imported cargoes.

 

"The net result of these tighter proposed levels is an even greater level of uncertainty for the [Chinese seaborne] market, and it is also supportive of domestic coal producers," said one market source.

A second market source, a trader, agreed that the lower trace elements standards for cargoes entering China were causing renewed anxiety among coal importers in China.

 

"The new standards are tougher, especially for phosphorus, and it is essentially another risk for the market to carry," said one trader.

 

"A lot of people have been scared away from the Chinese import market," he said.

 

The acceptable level for phosphorus in imported cargoes is cut to 0.1% starting July 1 from 0.15%, while for chlorine it is halved to 0.15% from 0.3%, and the threshold for arsenic is lowered to 40 millionth of one gram from 80 millionth of one gram.

 

The mercury requirement in the test is unaltered at 0.6 millionth of one gram, said market sources.

 

Removal of the test for fluorine will actually benefit three coal mines in Australia, including ones that produce thermal coal as a byproduct of pulverized injection coal.

 

One mine in particular produces around 2 million mt/year of thermal coal with a fluorine content of around 190 millionth of a gram as tested at its Australian loading port, and close to the existing limit allowed for entry into China.

 

The same mine in central Queensland is also understood to be the only one in Australia that produces thermal coal with a chlorine level of 0.8%, and higher than the new acceptable standard in China of 0.15%, said an informed market source.

 

Two other mines in Australia ship coal with a fluorine content of 110 and 130 millionths of a gram, respectively, including one large mine in New South Wales, according to a market source.

 

Lower allowable levels for phosphorus of 0.1% could snag thermal coal exports from two Queensland coal mines which have the trace element present in their product at 0.1% and 0.12% respectively, said a market source.

 

Only one Australian mine produces thermal coal with an elevated level of arsenic that is close to the new acceptable threshold in China of 40 millionths of one graph, and the arsenic level in this mine's coal is about 30 millionths of one gram, according to well-informed sources.

 

 

Source: Platts