China Coal Export Quota Falls Year by Year

SHANGHAI, Dec. 27 (SMM) -- Recently, China’s National Development and Reform Commission (NDRC) set the first coal export quota for 2012 at 18 million mt. 

As a kind of resource products, both the NDRC and the China National Coal Association (CNCA) encourage imports but restrict exports of coal. The coal export quota (first batch) plummeted by 46 million mt in only seven years from 2005 to 2012, with the coal export quota for 2012 only accounting for 28% of 2005’s quota, indicating the downward trend of China’s coal exports will continue in the future.

Changes in the import and export volume of coal were mainly attributed to the tax rate adjustments. China provided export tax rebates for coal exporters before 2006. The historical data shows that each round of tariff adjustments has been always associated with changes in the import and export volume and prices. China phased out export tax rebates on thermal coal and coal import and export tax exemption policy from September 15th, 2006, and levied a 5% export tax on coking coal which is scarce in China. China raised the provisional export tax rate of coking coal from 5% to 10% on August 20th, and imposed export tariff on other bituminous coals, setting the provisional export tax rate at 10%.

Coal, iron ore and other resources become scarce along with China's economic development, and enterprises producing this series of products belong to low value-added and high-pollution industries, so China’s policies will inevitably restrict coal exports but encourage coal imports. In this context, Steelease believes China’s coal imports will continue to grow and coal exports will fall further in the future.