Huge Surge In Dalian Coal Imports

Coal imports in the Dalian customs district surged in the first two months of 2009 affected by China's tax revenue policies and domestic coal demand. Statistics show that the district imported 357,000 tonnes in the first two months, up by 2.8 times YoY and valued at USD 53.09 million - an eleven-fold increase.

Coal imports in this area are mainly characterized by the following:

1. The quantity increased sharply both YoY and MoM. In February the import volume stayed at 280,000 tonnes, the largest volume in the last six months.

2. Import volume of common trade shot up. This volume remained at 269,000 tonnes in the first two months, accounting for 75.3% of all, while in the same period of last year there was only 771 tonnes.

3. The imports were largely by private and state-owned enterprises. Private enterprises imported 193,000 tonnes rising - double last year's figure - and state-owned enterprises imported 164,000 tonnes, in contrast to zero YoY. Only 18 tons were imported by foreign funded enterprises.

4. The coal was imported largely from Australia and Korea. Dalian customs district imported coking coal of 235,000 tonnes, 65.9% of the total volume, while there was no coking coal import record in the same period of 2008. Anthracite imports remained at 122,000 tonnes, up by 29.5%.

There are two main reasons for the increases:

1. Rigid demand led to an increase in coal imports. A gap in domestic coal capacity has long existed, so China has had to resort to overseas resources. In addition, the construction of the new plant of Anshan Iron and Steel Group had also added to Dalian's demand for coal.

2. The adjustments in tax revenue policies. Over the years China has been encouraging coal imports. On November 1st 2006 China lowered the coal import tax rate to 1% from 3% to 5%, then on June 1st 2007, it cancelled the import duty on most coal varieties. In 2009, as the economy has fallen into recession, China removed the existing 3% tax rate. With such incentives that Coal imports in Dalian customs district has shot up.

Source: Steel Guru