China reinstate coal tariff to help industry

China's tariff committee on Thursday decided to end zero duty on five coal products and reintroduce most-favored nation tariffs varying from 3 percent to 6 percent, beginning Oct 15.

The tariffs for anthracite and coking coal will be set at 3 percent, bitumite at 6 percent, and those for briquets and other coals at 5 percent.

The new tariff arrangement will limit coal imports and help struggling domestic producers. The zero duty was introduced some time ago to encourage coal imports and fill a domestic supply gap.

Guan Dali, a coal analyst with chem365.net, an industrial thinktank, said the adjustment was part of the government's support for the struggling coal industry .

As an immediate result of the tariff, the cost of imported thermal coal will be 20-27 yuan (3.25-4.40 U.S. dollars) higher per tonne, according to Guan's calculation.

The adjustment may relieve some pressure for domestic coal enterprises, as over 70 percent of them are now operating at losses, according to survey by the China National Coal Association.

To get through the hard times, 14 major domestic coal producers recently reached a consensus on output control.

Customs data showed China's coal imports dropped 5.3 percent to 202 million tonnes in the first eight months of the year, while exports slumped 27.5 percent to 3.93 million tonnes.