China to ban coal imports from small ports from July 1

The Dollar Business Bureau

China will ban the imports of coal from July 1 at small ports, according to a report by the state-run newspaper - China Securities Times on Wednesday.

China, the world's largest coal consumer, tightens the supply of this fuel as part of its efforts to manage glut as well as smog.

The move to ban coal imports is one of the latest attempts by the country to control the coal supply during summer and also to support the prices, which have fluctuated in the previous year in the wake of a series of regulations which are aimed to keep the prices of the fuel high enough so that they can support the miners. 

The ban will only cover tier II ports that were set up with approvals from provincial or local authorities. However, it does not include the larger ports such as Port of Tianjin.

Second-tier ports that are linked to major power utilities of China have stopped shipments of coal from loading as well as docking at the ports beginning this week, a trader in Ningbo port in east China's Zhejiang province said.

The authorities conducted random inspections of coal consignments and thoroughly checked the process before clearing the cargoes, the trader added.

“It is extremely hard to do import business now. Coal imports are set to slow down if this continues for a long time,” the trader said.

China’s move to address excess supply in coal has resulted in closure of several mines across the nation, limiting the availability of fuel during summers when electricity demand is at its peak.

The Chinese government has cracked down on the imports of coal to control the supply of low-quality fuel. The country’s coal imports declined 10.5% in May as compared to the previous month.

Shipments of the fuel dropped 10.7% to $722.1 million in the first five months of the current year, according to China Customs data.

The country’s major planning body has prodded coal mines to augment the supply of premium-grade coal capacity in order to ensure supply of electricity during peak hours to major regions in summer.