June 8, 2017 / 4:26 AM / 2 months ago

UPDATE 1-China May coal imports drop as Beijing cracks down on foreign shipments

* China May coal imports stand at 22.19 mln tonnes

* That is down 10.5 pct from April

* But over 15 pct higher than year before (Adds detail)

BEIJING, June 8 (Reuters) - China, the world's largest coal buyer, imported 22.19 million tonnes of coal in May, down 10.5 percent from a month earlier, preliminary customs data showed on Thursday, as sluggish domestic prices and tightening import policies hurt demand.

But imports of the fuel were up 16.6 percent from a year earlier, figures from the General Administration of Customs of China showed.

The numbers include lignite, a type of coal with lower heating value that is largely supplied by Indonesia.

For the first five months, coal shipments rose 30 percent from the year before to 111.7 million tonnes.

The month-on-month drop in imports came as the Securities Daily newspaper reported in May that Beijing had asked utilities to reduce their purchases of overseas coal by 5 to 10 percent this year in an effort to restrict low-quality imports.

Falling domestic prices have also made imports from Australia and Indonesia less competitive. The most-active-traded thermal coal futures prices touched a two-month-low of 503 yuan ($74.02) per tonne on May 11, down more than 10 percent from a record 566 yuan per tonne on April 5.

Inventories at China's major coal port Qinhuangdao SH-QHA-COALINV climbed to 5.94 million tonnes in late May, the highest in three months.

Forecasts for an early heat wave could help boost demand before the peak summer season in July, analysts and traders said, with electricity usage jumping as people crank up their air conditioning. But they added that large coal stocks at ports may drag on prices in coming weeks.

For more details, click on ($1 = 6.7951 Chinese yuan renminbi) (Reporting by Josephine Mason and Meng Meng)

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