China to increase coal export quota to 38 mln tons for 2011 - NDRC
Shanghai. March 18. INTERFAX-CHINA - China's National Development and Reform Commission (NDRC) announced March 17 that coal export quotas for the whole of 2011 will be 38 million tons, up from 25.50 million tons last year.
While the NDRC said that the export quota will be increased, the current quota for domestic coal producers stands at 18 million tons. Industry experts believe the increase will be put into effect in the second half (H2) of 2011.
China's coal export volume shrunk from 82.98 million tons in 2003 to 19.03 million tons in 2010, due primarily to rocketing domestic demand.
The issue of China's coal export quotas has attracted increasing international attention due to concerns regarding its lowering of quotas for other natural resources, such as rare earths.
"China reduced its rare earths export quota this year, a move some critics saw as a violation of World Trade Organization (WTO) rules," said Huang Teng, a coal expert with Beijing LT Consultants Ltd. By raising the coal export quota, "the central government may be attempting to assuage international concerns by loosening controls on the export of other commodities"
Huang believes it is unlikely that China's coal producers will be eager to meet the NDRC-set coal export quota, as coal prices may soon drop precipitously. Huang noted that the March 11 earthquake in Japan, a major coal importer, will weaken demand on the international coal market due to a drop in Japanese manufacturing.
"Coal prices will be subject to downward pressure this year, giving China coal companies less incentive to export," said Huang.
Japan imported 184.60 million tons of coal in 2010, around 60 percent of the global volume.
China imported 164.83 million tons of coal in 2010, up 30.99 percent year-on-year. It is now a net importer of coal. As domestic demand remains robust, lower international coal prices will likely motivate increased buying on the part of China coal importers, said Huang.
-TW