China's Coal Exports Expected to Drop Again This Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--The National Development and Reform Commission (NDRC) has issued a coal-export quota of 31.8 million metric tons for the first batch of 2008, 24% lower than the quota announced at this time last year.

The quota was put in place as part of an energy-protection policy. In 2003, the quota in China reached 100 million metric tons and has declined steadily. Coal exports dropped to 80 million metric tons from 2004 to 2006, and even further to 70 million metric tons in 2007. According to a report, China's total coal exports this year are expected to reach just 52 million metric tons. In addition, China canceled the tax refund for power-coal exports, as well as a policy on duty exemption on coal exports in September 2006. A 5% fee has been imposed for coking-coal exports.

Currently, China has four main coal exporters: China Coal Energy Corporation (Beijing), China Shenhua Group Corporation (Beijing), Shanxi Coal Import & Export Corporation (Taiyuan, China) and China Minmetals Corporation (Beijing). Based on a related report, China Coal Energy Corporation acquired 13.1 million metric tons of the coal export quota.

Industry insiders believe the price of coal exports will jump this year. However, as coal exports account for only a small portion of the total volume of coal sales in China, a reduction in exports is not expected to have a big influence in the coal market. In fact, because of the rising price of coal in the domestic market and the low price in the international market during the first half of last year, the quota of 70 million metric tons was not met.

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