China decreases coal export quota

In 2006 China exported 63.3 million mt of coal, down 11.7 percent year on year, and imported 38.25 million mt, up 46.1 percent. Considering the sharp rise in imports, the government decided to reduce the export quota of coal for 2007. The rapid economic growth in China has caused the coal demand to increase in the country, especially in the power and steel industries. As a result, the Chinese authorities are expected to impose a 10 percent export tariff on thermal coal in addition to the five percent on coking coal. However, the measures have not been sufficient to curb exports to such an extent as to ensure the satisfaction of domestic demand so far. Nevertheless, they helped exports to remain more than 15 million mt below the export quota for the entire year. China has announced the first coal export quota for 2007 as 42 million mt. This is 22 million mt lower than the first quota announced in 2006. Moreover, the quota for all of 2007 is expected to be 70 million mt, while it was 80 million mt last year. Meanwhile, in January 2007, China imported 4.7 million mt of coal and exported 3.29 million mt, thus becoming a net importer. Market rumors indicate that further tariffs may be imposed on coal exports.