BEIJING (Reuters) - China has eased restrictions on coal imports by quickening the customs clearing process, sources in the trade and at utilities said on Tuesday, dampening record high prices as cheaper foreign supply lands at ports.
The country tightened imports by banning small ports from receiving foreign coal cargoes and delaying the process of issuing quality reports for imports from July 1.
Traders said it took as many as 40 days to clear customs compared with one to two weeks previously.
Prices of the most-active thermal coal futures have fallen more than 5 percent from a record high of 641 yuan ($98.77) per ton hit on Dec. 18.
Sources said authorities at major coal import hubs have shortened the time it has taken to issue a quality inspection report for foreign coal cargoes and have cut random checks since late December.
“More supplies are arriving at ports as utilities ready to stock up cheaper foreign coal,” a Beijing-trader said.
A campaign to switch millions of households from using coal to natural gas has created a shortage of natural gas, forcing factories and many gas power plants to shut.
The campaign also unexpectedly boosted demand from coal-fired power plants, which are operating at higher rates to provide electricity for winter heating.
“Power plants signed a large amount of import contracts for January and reduce consumption of high-price domestic thermal coal,” another trader said.
In December, China temporarily halted imports by delaying customs clearance after the total import volume exceeded an unofficial government target, two trade sources said.
Market players, however, expect the curbs to make a comeback as early as next month on weakening demand.
Reporting by Meng Meng and Ryan Woo, Additional reporting from Ruby Lian; Editing by Biju Dwarakanath