People in China National Coal Association confirm the National Development and Reform Commission is planning the reduction of value added tax and port charges so as to increase coal imports. This will be another step after the power tariff hike aimed at promoting coal imports to ease the tight coal supply.
According to the calculations, the import cost will drop by CNY 9 per tonne with 1 percentage point of import VAT rate cut each time. When it dips from the current 17% to 13%, the CIF price will decline by CNY 36 per tonne and the gap will be lessen from CNY 108 per tonne to CNY 72 per tonne. And the port charges, including cargo dues, ISPS, harbor tolls and storage fees, total about CNY 33 per tonne to CNY 36 per tonne.
China Minzu Securities analyze the reduction of import VAT and port charges will boost thermal coal imports but not precisely stabilize coal prices. In the short term the increasing import does help curb rising coal prices but in the long term it will firm international coal demand which in turn pushing up domestic coal prices.
Mr Yaojian spokesman Ministry of Commerce declared at a regular press conference on June 15th that China will further cut import tariffs. But he did not disclose related goods and tariff.
Research report issued by Macro Securities on June 16th said the National Energy Board is also studying on conservation-oriented development of coking coal, which will also be launched in a few days.
( Source: www.steelguru.com )