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China authorities, power firms discuss curbing low-quality coal imports
May 10, 2017 / 9:29 AM / 4 months ago

China authorities, power firms discuss curbing low-quality coal imports

BEIJING, May 10 (Reuters) - Chinese authorities met with the country’s leading power companies on Tuesday to discus measures to curb low-quality coal imports and fight overcapacity in the world’s top coal consumer, according to a meeting document and an industry source.

It was not immediately clear what measures will be put in place following the meeting, which comes nearly two months after officials started ramping up controls of coal imports that caused delays to shipments at ports.

The Tuesday meeting in Beijing was organised by the General Administration of Chinese Customs, and was attended by officials from the Ministry of Environment Protection, Ministry of Commerce and the National Energy Administration, according to the document seen by Reuters.

Leading power firms including Huaneng Group and Datang Group were also invited to the meeting, the document showed.

The two companies mainly import Indonesia coal, considered low quality by the Chinese government because of its high sulphur and ash content and low heat value.

Zhang Min, an analyst with Sublime China Information Group, said was not surprised by the restrictions on low-grade coal imports which could hit Chinese purchases of Indonesian coal.

Huaneng declined to comment. Datang did not respond to request for comment.

“The meeting was to discuss how to put in place the measures to curb low-quality coal imports,” the document said.

Traders say the lack of detail on new concrete measures, such as specifying the quality and grade requirements, has left them bracing for further restrictions such as longer-than-usual quality checks at customs that may lead to further port delays.

“We are closely watching out for any specific rules to be publicized,” said a Beijing-based coal trader.

“One option could be the government asks power firms to switch to more domestic coal at the expense of imports. But that wouldn’t be most effective as in the end imports will be driven by costs,” said the trader.

Reporting by Beijing newsroom and Chen Aizhu; Editing by Christian Schmollinger

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