China plans to reintroduce a 3% import tariff on metallurgical coal starting January 1, 2024, following a zero-duty phase since May 2022. While coal imports from Australia and ASEAN remain untaxed, this change might affect coking coal imports from Russia and Mongolia. Market observers expect minimal impact on these nations due to competitive pricing and limited local supply but anticipate potential price rises and reduced supplier margins.
China's Tariff Commission of the State Council recently announced the reinstatement of a 3% import tariff on metallurgical coal effective from January 1, 2024. Notably, since May 1, 2022, China has maintained a zero provisional import duty rate, an initiative set to conclude on December 31, 2023. Coal imports from Australia and ASEAN countries will continue to enjoy a zero tariff under the respective free trade agreements.
Despite this shift, experts foresee some repercussions for coking coal imports from Russia and Mongolia. As imports from these nations, outside Indonesia and Australia, constituted a significant portion this year, the tariff reinstatement might initially impact trade dynamics. However, the prevailing price competitiveness and limited local coking coal supply in China may mitigate substantial disturbances from this change. Nonetheless, expectations linger for potential price hikes and diminished supplier margins.
The imposition of tariffs could significantly impact the supply of premium coking coal from North America. Australia might gain a competitive edge in this scenario, especially considering the constraints in accessing premium grades within the Chinese market, amplified by recent mine inspections following fatal accidents. These regulatory measures are expected to negatively affect overall coking coal availability in 2024.
Conversely, the demand for coking coal might witness an upswing, potentially driving prices higher in the upcoming year. Meanwhile, China's stance on coke imports remains unchanged, maintaining a zero import tariff throughout 2024.
China's decision to reintroduce a 3% import tariff on metallurgical coal in 2024 may steer dynamics within the global coal market. While expected impacts on Russian and Mongolian coal imports remain relatively subdued due to competitive pricing and limited local supply, the restructured trade landscape might lead to fluctuations in prices and supplier margins. Furthermore, the stricter regulatory measures in accessing premium coal from North America may further compound supply constraints, influencing market dynamics in the forthcoming year.