Sources said utility Guotou Qinzhou had canceled 250,000 mt of seaborne coal due for arrival in May because of the uncertainty, a cancellation letter seen Monday by S&P Global Platts from Guotou to participating traders said.
The move comes hot on the heels of Guangxi implementing measures last Wednesday, targeting local utilities competing for the limited amount of quota left for the year.
“In order to reduce risk for parties amid unclear implementation of import policy in Guangxi, we will cancel the recent tender 0041-20XJ0151,” the letter said.
“We shall call another tender upon obtaining clarity on the implementation of import policy,” the letter added.
Guotou sought 250,000 mt of 3400 kcal/kg NAR to 4,500 kcal/kg NAR seaborne coal last Monday.
The tender closed on April 9.
Guotou was not available for comment.
At least three other Guangxi end-users including utilities, cement plants and paper mills have canceled up to 557,000 mt seaborne coal due for arrival from May to June because of limited import quota at Guangxi’s ports, sources said Monday.
Another 390,000 mt seaborne coal was diverted from Guangxi to neighboring Xinsha port in Guangzhou, currently waiting for discharge because of the uncertainty surrounding import policy, a China-based trader said.
“Not only utilities in Guangxi, the local steel mills and cement plants are running out of import quotas,” a south China-based trader said.
More Chinese ports are running low on import quotas, and traders said they are expecting more measures to cap imports in the second half of 2020 at 2019 levels.
Once import quotas are hit, actual implementation of policy may vary across China, a China-based trader said.
“As the effect of the coronavirus pandemic lingers in China, China will prioritize and support the domestic mining industry,” he added.