In order to strengthen the guarantee of energy supply and promote high-quality development, the Customs Tariff Commission of the State Council has decided in accordance with procedures that from May 1, 2022 to March 31, 2023, a provisional import tax rate of zero will be imposed on coal.
According to the schedule of the announcement, the provisional import tax rate of zero will be implemented this time for imported coal that originally implemented the most-favored-nation tax rate of 3%, 5% or 6%.
According to Shanghai Securities News, at present, the largest source country of my country's coal imports is Indonesia. According to the Framework Agreement on Comprehensive Economic Cooperation between the People's Republic of China and the Association of Southeast Asian Nations and the Import and Export Tariff (2021), the currently applicable tax rate is 0.
The most-favored-nation tax rate applies to coal imported from Russia, Mongolia, and Canada from other import source countries, and the tax rate varies according to different coal types. After Australia cut coal exports to China last year, Russia became my country's second-biggest coal importer after Indonesia.
A number of industry insiders said that under the scenario of high international coal prices, the tariff policy will have a limited impact on the import coal market in the short term, and may have a certain impact on the long-term supply.
According to Guosheng Securities, the current FOB price of 4600 kcal thermal coal in Russia is about US$149.8/ton. If the tariff is reduced from 6% to zero, the CIF duty payment cost will be reduced from 1430 yuan/ton to about 1350 yuan/ton. The domestic quotation of 5000 kcal thermal coal is 950-980 yuan / ton, and the price of nearly 400 yuan / ton is still upside down.
China's seaborne coking coal mainly comes from Russia, the United States, and Canada. The current price of coking coal shipped to China plus freight is about US$515/ton. If the tariff is reduced from 3% to zero tariff, the duty-paid cost will be reduced from 3965 yuan/ton to 3855 yuan/ton .
The first-line quotation of coking coal in Jingtang Port in China is 3500-3600 yuan / ton, and the price of 250-350 yuan / ton is still upside down.
Data from the National Bureau of Statistics shows that last year, China produced 4.07 billion tons of raw coal and imported 323 million tons of coal, an increase of 6.6% year-on-year. The import volume exceeded 300 million tons for the second consecutive year. The coal import dependence was 7.3%, an increase of 0.05 percentage points year-on-year.
According to Qinhuangdao Coal Network, under the circumstance that coal imports are expected to decrease, the relevant ministries and commissions of the state have organized a mid- and long-term contract to supplement the emergency guarantee for imported coal. The amount of mid- and long-term contracts signed is 158 million tons, accounting for about 49% of the country's coal imports in 2021, and the vacancy of nearly half of the total imports has been guaranteed by the policy.
In order to ensure the stable supply of domestic coal and other energy sources, some provinces in southeastern and southern China have also relaxed customs clearance restrictions on imported coal, and the customs clearance procedures of the new process have been significantly simplified.
The previous Indonesian coal import policy requires that, except for Guangdong, other South China ports need to provide terminal purchase contract endorsement. Now Guangxi has fully liberalized the customs clearance of Indonesian coal imports, and Fujian has partially liberalized. This is conducive to the rapid entry of Indonesian coal, which is intended to encourage traders to import customs clearance.
According to data from the General Administration of Customs, coal imports in March 2022 were 16.423 million tons, a year-on-year decrease of 39.9%; in the first quarter, coal imports totaled 51.812 million tons, a year-on-year decrease of 24.2%.
Zhang Jianhong, a senior engineer at China International Engineering Consulting Co., Ltd., said that the current high price of overseas coal is the main reason for inhibiting the growth of imports. The implementation of a provisional import tax rate of zero for all coal this time will help reduce import costs and expand the import of coal resources. It is the coal import from Mongolia, Russia, Canada and other countries, which can better ensure the supply, guide the downstream coal industry to reduce coal consumption, and promote the transformation, upgrading and high-quality development of the coal industry. However, until the international energy prices fall, it is expected that coal imports will be difficult to increase significantly.
