Singapore — China's National Development and Reform Commission has told five major state-owned utilities not to buy Australian thermal coal for the time being, in a move to boost domestic prices, market sources said.
Deals for Australian thermal coal cargoes transacted on and after Friday were affected, the sources said.Thus, a northern state-owned power plant canceled at least two cargoes of Australian thermal coal purchased late Friday, they said.
"The tender award price for 5,500 kcal/kg NAR Australian thermal coal was around Yuan 360/mt CIF ($50.6/mt), which was around Yuan 120/mt lower than the prevailing market price of similar grade of Chinese domestic coal at Yuan 485/mt FOB Qinhaungdao on Friday," a source said.
Many utilities were keen to buy Australian coal last week to cut the cost of production, given the price gap with domestic material, sources said.
"Several state-owned end-users including but not limited to utilities and steel mills have received verbal notice that Australian coal import could face restrictions in the near term," a source said.One of the utilities called an internal meeting Saturday to pass on the information so as to adjust upcoming procurement plans, another China-based trader close to the subject matter said.
Some buyers in China were canceling upcoming tenders for Australian coal while end-users have cut down imports of Australian coal even though they were not given further details on extent of the restriction, traders said.
Chinese utility Huadian declined to comment, while the NDRC and other leading utilities -- Datang, Huaneng, Yuedian and Zhejiang Energy -- were not available for comment.
Source:Platts |
