China's Ministry of Transport is studying policy measures on control of abnormal increase of coal imports along China's southern coast, as inventories of the fossil fuel staying high at northern ports amid weak demand from downstream users.
The Securities Times cited one unnamed authority as said that the ministry has proposed to the State Council to control the abnormal imports increase under the framework of international trade rules.
Imported coal presently accounts for almost 1/3 of the seaborne coal supplies in coastal provinces like Guangdong, Guangxi and Hainan. In the first 5 months of 2012, Guangdong imported 26.56mt coal or 38.4% of its seaborne coal supply up 80.2% YOY while Guangxi 7.53mt up 23.5% YOY.
While balancing the domestic market, the influx of coal imports has curbed the price escalation at China's northern ports and led to the increasingly high stockpile at these ports. High piles of coal at leading ports such as Qinhuangdao have greatly increased risks of spontaneous combustion and collapse, making it very urgent to lower inventory.
Data showed that coal stocks at Qinhuangdao port was still staying at 8.5mt as of July 8th 2012, though dropped from the recent record high of 9.46mt. High stocks are also seen in other ports like Caofeidian and Huanghua and discharge ports and power plants in Guangdong. Statistics of Qinhuangdao Port Group showed the number of vessels in loading formalities in Jun dropped sharply to a dozen a day from the previous 50 to 60.
Key power plants have stocks enough to cover more than 28 on average and some plants even higher at 50 days. As a result, some power companies have defaulted on term contracts signed with miners