Known as the Air Pollution Prevention and Control Action Plan which was approved in September, the reform bans coal imports of more than 16% ash and 1% sulphur for its three most populated regions from the start of 2015.
“Following the announcement there was uncertainty over the interpretation of the regulations and the extent to which it will affect China’s imports,” the joint BREE-Westpac report said.
“The general consensus is that the regulations will have a limited effect on China’s imports and is more likely to affect domestic coal. The National Development and Reform Commission is expected to release a second paper providing greater detail on the regulations towards the end of the year.”
The Chinese government also re-introduced import taxes of 6% for thermal coal and 3% for metallurgical coal in mid-October.
While there is no data yet on the possible impacts, September quarter data revealed that Australian thermal coal exports were up 1.3% year-on-year to 11.8 million tonnes.
Yet lower prices, with premium grade (6000 kilograms per calorie in energy content) Newcastle exported thermal coal priced at $US68 a tonne, led to a 17% fall year-on-year in the value of this export trade.
The Australian premium hard coking coal benchmark was a low $120/t in the September quarter, although it slipped another $1/t in the underway quarter.
“Australia exported 11Mt of metallurgical coal to China in the third quarter [September quarter], down 11% year-on-year,” BREE-Westpac said.
”The value of these exports declined 21% year-on-year to $A1.22 billion ($US1.06 billion).”
