SMM Policy Analysis: Reinstated Coal Import Tariffs Will Impact Coking Coal More Than Thermal Coal

China's Customs Tariff Commission stated that starting from January 1, 2024, coal import tariffs are reinstated. General rate: 20%, preferential: 0%, conventional: nearly 0%. Most-favored-nation rates: 3% for anthracite, coking coal, lignite; other coal types: 6%.
Policy Analysis: Reinstated coal tariffs impact coking coal more than thermal coal. On December 20, 2023, China's Tariff Commission announced adjustments to import/export tariffs on some goods.
From January 1, 2024, coal import tariffs are reinstated. Coal from Australia and ASEAN remains tariff-free; imports from other countries are subject to most-favored-nation rates: 3% for anthracite, coking coal, lignite; thermal coal at 6%. Previously, from May 1, 2022, to December 31, 2023, a zero provisional tax rate applied.
SMM understands that tariff changes will significantly affect coking coal imports, especially from Mongolia and Russia, which dominate last year's imports, followed by the US and Canada, with the top four accounting for 92.24% of total imports. Australian coking coal, with only a 2.52% import share, remains tariff-free.
Post-tariff adjustment, thermal coal imports from Indonesia and Australia, top two sources of imports, will remain tariff free in 2024. Tariffs on Russian and Mongolian coal face a hike from 0% to 6%. Coking coal import costs may rise by 35-85 yuan/mt, and thermal coal by 25-60 yuan/mt.
Overall, reinstated coal tariffs will raise traders' costs, hitting coking coal harder than thermal coal.
Zero provisional tariff rate on coke and new Indonesian coke ovens may boost coke imports after coking coal is processed into coke.