* 3 pct tax set on lignite imports from some countries
* Lignite exempted from import tariffs under China-ASEAN FTA
* Indonesia accounted for 97 pct of China's lignite imports
(Releads, adds comments from customs official)
By Fayen Wong
SHANGHAI, Sept 2 China has announced a 3 percent
tax on imports of steam coal with low calorific value but the
move will have no impact on top supplier Indonesia as a trade
deal with Southeast Asian nations will ensure that those
shipments continue to enjoy zero tariff.
Indonesia is the biggest seller to China of lignite, a form
of low-grade coal, with its shipments accounting for 97 percent
of China's total lignite imports in 2013 up to end of July.
Indonesia's exemption from the tariff means the tax would
have minimal impact on China's overall coal imports. Local
miners, such as Shenhua and China Coal,
will need to fend for themselves as they fight against cheaper
China's State Council, the country's cabinet, last week
approved a plan to implement a 3 percent tariff on lignite
imported from countries under the most-favoured nation trade
status, according to a statement from the finance ministry.
The new tax rule came into effect on Aug. 30, according to
the statement. Lignite currently enjoys zero import tariff.
(For more details, click on: here)
The statement did not specify what grades of lignite, in
terms of heating value per kilogram, would be affected, although
industry sources said Chinese customs statistics classify coal
with a calorific value of between 3,800-4,200 kcal/kg as
A customs official said the new regulation will not affect
exporters from Indonesia or other countries that are members of
the Association of Southeast Asian Nations (ASEAN), as a
China-ASEAN free-trade agreement has brought import tariffs for
lignite to zero since the start of 2012.
"The 3 percent tax will only be applicable to exporters that
are outside of the ASEAN group," said the official who was not
authorized to talk to the media and thus did not want to be
identified, adding that shippers will also need to provide a
certificate of origin.
Traders said most miners and trading houses are able to
provide such documents so the requirement would have little
impact on shipments.
Non-ASEAN countries that export lignite to China include
Australia, North Korea, Russia and Mongolia, according to
customs data. Those countries account for just about 4 percent
of China's lignite imports.
Beijing's move to tax imports comes after the domestic coal
association lobbied the government in May to ban imports of all
low-grade coal, citing the impact on local miners.
"The coal industry was making a lot of noise and wanting
Beijing to help the local miners but the government knows that
Chinese miners need to be more cost effective," said Cao
Zhongfang, an analyst with industry portal SXCOAL.com.
China imported 187 million tonnes of coal, including
lignite, in the first seven months of 2013. Total lignite
shipments stood at 35.97 million tonnes during the period, up
about 12 percent from year ago.
With imported lignite currently priced at about $47 a tonne
on a landed basis, the newly imposed tariff would add about 8
yuan ($1.31) a tonne to its cost, industry sources said.
Still, China's major coal producers have been slashing
domestic prices since July to gain market share, in a move
likely to slow import growth for the rest of the year as
overseas shipments become less attractive in the top buyer and
producer of the fuel.
Domestic coal, with a heating value of 5,500 kcal/kg, fell 7
yuan from a week ago to 546 yuan ($89.21) per tonne, according
to the Bohai-Bay Rim Steam Coal index. Prices have already
dropped 14 percent this year.
($1 = 6.1195 Chinese yuan)
(Additional reporting by Viriya Paramita; and Michael Taylor in
JAKARTA; Editing by Muralikumar Anantharaman)