The Chinese thermal coal market was in a state of flux after talks of Australian coking coal import restrictions were imposed in parts of China, sources said.
Market sources with knowledge of the matter told S&P Global Platts Wednesday that China had imposed port restrictions on coking coal imports at several ports in Northeast China including Bayuquan, Dandong and Dalian effective Tuesday afternoon.
Three Chinese steelmakers confirmed that they had received verbal notice from Northeast China ports’ agents on the port restrictions imposed.
Chinese coking and thermal coal futures prices spiked early Thursday, with May futures contract for 5,500 kcal/kg NAR thermal coal jumping 2.3%, while the May contracts for coking coal surged over 4% in mid-afternoon Asian trade on Thursday.
“Usually before the Lunar New Year holiday, the futures markets would be calm, too, so the jump is likely a reaction to news of the curbs,” a China-based trader said.
Sources said that a port in Shantou in southern China and Qingdao in north China had separately imposed import curbs for coal but there were no further details.
Port authorities were not immediately available for comment.
Some other market sources, however, said they had not received any document or verbal notice regarding the Australian coking coal restrictions.
“In short, [there had been] a lot of noise and no official announcement on anything as yet”, a Singapore-based source said.
This comes as most Chinese sources were preparing to go on Lunar New Year holiday which starts on February 4.
“This will definitely affect buying sentiment for Newcastle high-ash thermal coal,” a China-based trader said.
“Import volume on a Capesize is big, so it’s even riskier to import amid such uncertainties,” the trader added.
Another China-based trader said that there had been no talks about import restrictions on Indonesian thermal coal.
“I’ve not heard of such restrictions yet, but who knows what’s going to happen after the holidays,” the trader said.