Reports show that some Chinese coal traders who import from the United States have started to obtain future supplies locally. They are waiting to receive the latest shipments imported from the United States before customs duty starts on Thursday, amid a major trade dispute between the world’s two largest economies.
The data indicated that at least 6 shipments of American coal to Chinese importers were due for this month at least, but at least 3 of them were either on the road or waiting for unloading in ports on Wednesday.
As of Thursday, the United States will impose its new tariffs on $16 billion of Chinese goods, and Beijing has also pledged imposing additional tariffs on a similar amount of US imports, including metals, fuel and coal.
A senior official in the commercial house of Shanghai Runhei International, a major local coal-trading company, said its former US coal cargo was unloaded at Qinhuangdao Port earlier this week. He added that they have completely stopped imports of metallurgical coal, which is popular among Chinese steel mills in late July.
US shipments to China due in August were booked in May, right after China threatened to impose heavy tariffs on coal coming from the United States as Chinese buyers were collecting large quantities at bargain prices.
Shanghai Runhei said it would increase domestic coking coal purchases rather than foreign supplies to meet rising customer demand, a policy that would gain the company more power in Chinese markets.
China’s top coal traders say that if US coal producers do not offer great bargains, Chinese buyers will not import American coal.
China’s appetite for American coal increased this year after rising demand for alternative supplies, after Australian coal prices hit their highest level in six years in July.
Chinese coal market analysts say Chinese coal importers can easily switch to local coal or Australian and Indonesian coal, as US imports are only a tiny share.
Some Chinese buyers also hope to use the US-China trade war as a bargaining chip for getting cheaper supplies in the United States.
Coking coal futures rose 12% since the beginning of July to 1,334 yuan ($194.06) on Wednesday.
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