The energy game between Russia and Europe continues: zero tariffs on domestic coal imports, limited impact on cost reduction and supply guarantee
The Paper 2022-04-28 21:35 According to the Ministry of Finance on April 28, the Customs Tariff Commission of the State Council announced that in order to strengthen the guarantee of energy supply and promote high-quality development, it has been decided according to procedures that from May 1, 2022 to March 31, 2023, the tax rate for coal will be Zero provisional import tax rate.
The industry believes that the provisional tax rate for coal imports is zero or to reduce the cost of imported coal and alleviate the situation that "the sharp rise in overseas coal prices has led to the upside-down of domestic and foreign coal prices, which inhibits imports".
According to data from the National Bureau of Statistics, coal imports in March 2022 were 16.42 million tons, a year-on-year decrease of 39.9%; in the first quarter of 2022, the national coal import volume was 51.81 million tons, a year-on-year decrease of 24.2%. According to estimates, the annualized scale of imports in the first quarter was only 200 million tons, a sharp drop from 320 million tons in 2021.
It is understood that from 2018 to 2021, my country's coal imports were 280 million tons, 299 million tons, 300 million tons and 320 million tons, of which thermal coal accounted for 81% and coking coal accounted for 17.1%. my country's coal importing countries mainly include Australia, Russia, Mongolia, Indonesia, the United States, and Canada. Except for Australia and Indonesia, which have a tariff of 0, the import tariffs of other countries vary by coal type, ranging from 3-6%.
After the European Union approved the ban on Russian coal in early April, a large number of European buyers began to "grab coal", and the global coal market fell into a panic of "coal shortage". According to CCTV Financial News, European countries imported 809,000 tons of coal from the United States in March, a total of 1.3 million tons of coal from Colombia, and 287,000 tons of coal from South Africa, a year-on-year increase of 40.5%. At the same time, Japan is also frantically grabbing coal recently. In March, Japan’s total coal imports totaled 16.711 million tons, a year-on-year increase of 15%.
Under the energy game between Russia and Europe, the “tug-of-war” in which Europe plans to stop using Gazprom and Russia voluntarily cuts off supply continues. The global energy market’s increasing demand for alternatives to coal has forced international coal prices to remain high.
In March, the average price of thermal coal in Newcastle, Australia was 314 yuan/ton, a year-on-year increase of 231% and a record high. As of mid-April, Australia's Newcastle thermal coal price averaged $302 a tonne, while the May contract for Newcastle thermal coal futures rose about 30% month-on-month. According to Bloomberg, the Australian coal company Whitehaven Coal said that the global coal trade has been disrupted by the Russian-Ukrainian situation, and the coal price rally can continue into next year.
The sharp rise in international coal prices has led to the upside-down of domestic and foreign coal prices, inhibiting the enthusiasm for imports.
According to Guotai Junan’s research report, China will import about 190 million tons of coal from Indonesia in 2021, accounting for nearly 60% of imports. The increase in Indonesian coal prices will further expand the price gap between domestic and foreign coal. After considering factors such as calorific value, sea freight, exchange rate and value-added tax, the calculation The corresponding domestic arrival price is 1925 yuan / ton, which is more than 600 yuan / ton higher than the cost of southern ports. The high price difference will further inhibit the enthusiasm of imports and have a greater impact on supply.
The data shows that since 2022, the Indonesian government has raised the benchmark coal price for three consecutive months.
The above-mentioned research institutions also stated that my country’s dependence on coking coal imports accounts for about 10%, and the supply side is greatly affected by imports. After the import of Australian coal is restricted, coking coal importers are mainly Mongolia and Russia. Currently, Mongolian coal imports are still repeatedly affected by the epidemic. The average daily customs clearance vehicle is lower than the historical average. Although the settlement problem of Russian coal has been solved, due to the limitation of transportation capacity, the import volume cannot increase significantly in the short term, and the supply of coking coal will remain tight due to the decline in imports.
Domestically, the National Development and Reform Commission and other departments have successively issued documents and measures to increase coal supply and price stability. On April 27, Ordos signed a medium- and long-term contract for the emergency support task of imported coal with representatives of relevant departments of 9 provinces and regions including Guangdong and Zhejiang, and assumed the task of 45.4 million tons.
Data show that in the first quarter of 2022, my country's raw coal output was 1.08 billion tons, a year-on-year increase of 10.3%, reaching a high level in the fourth quarter of last year.
Peng Mei News has learned that all parts of the country may usher in a large-scale resumption of work and production, which will drive the recovery of industrial electricity consumption. After the superposition of June, residential electricity consumption began to enter the peak season, which further boosted coal demand.
Huawen Futures said that considering the serious inversion of the current import spread, even if calculated at the zero tariff level, the foreign price of homogenous coking coal is still nearly 400 yuan/ton higher than the domestic price. The policy has little impact on the current supply-side shock, and there will be a certain degree of growth expectation for the long-term supply.
Guotai Junan said that judging from the 3% tariff reduction, the impact on coal import prices is in the range of 30 to 50 yuan/ton, which has a very limited impact on the current seaborne coal price adjustment and is not enough to reopen the import window of Canadian coal and U.S. coal. Previously, there was no import tariff for Indonesian coal. The small customs clearance of Mongolian coal was mainly due to the impact of epidemic prevention and control, and non-tariff reasons.
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