According to IHS China Coal Daily, a North Korean anthracite cargo will be returned to sender after it failed new trace element inspections which started from January 1.
“The failure was on mercury content,” Macquarie Wealth Management commented.
“While the volume of material likely to fail such inspections is low, this adds to the feeling at Chinese coastal power plants that importing coal is both not something the government are promoting and also a higher risk trade – very similar with what happened to copper scrap imports during Operation Green Fence in 2013.
“We believe these restrictions will stay in place until the government are happy with the corporate debt structure of the Chinese domestic industry, and as a result there will be increased pressure on seaborne tonnes to be cut into Q2.”
The broker has previously forecast China to import 39 million tonnes less coal in 2015 due to other coal quality restrictions and coal taxation measures introduced since October – and said this equates to a 10Mt annual fall in global seaborne exports.
