context: Central government has been using coal import restrictions as a tool to balance domestic demand. In high-demand seasons (summer and winter), restrictions are usually relaxed to ease supply stress. The tool has been used multiple times since July 2017 and in October 2018, though, entering the peak demand season, NDRC decided to impose the restrictions again.

Since 15 November 2018, rumours have been circulating in the market that customs declaration are halted for import coal. National Development and Reform Commission (NDRC) stated in October that the coal import volume should not exceed 2017 level (271 million tonnes). According to General Administration of Customs, China imported 252 million tonnes of coal in between January and October 2018. Therefore, in principle, imports for November and December should not exceed 19 million tonnes, notes Jiemian and Futures Daily. Around 10 million tonnes of the remaining quota would have been used by mid-November, which leaves the December quota very limited, estimates Zhang Xiaojin 张笑金 Everbright Future senior coal analyst.

Coal stockpile is high in coastal coal-fired power plants and is enough to guarantee supply for over 30 days, according to Jiemian. With winter supply secured, import is likely to be restricted. Nevertheless, there is a lack of consensus amongst Chinese experts regarding the strength and duration of this restriction

  • on restrictions
    • restrictions will not be strictly based on 2017 import volume. With high demand in December and January, coal import restrictions would be flexible (Ma Junhua 马俊华 Xindingsheng vice general manager)
    • strict restriction is certain (Fang Jie 方婕 Funeng coal futures analyst)
  • on duration
    • imports delayed in November and December will be processed in early 2019 (Liu Xinhua 刘新华 Fenwei Energy Information vice general manager)
    • consumption in November and December will determine whether restrictions will remain in place in January (Fang Jie 方婕)
    • coal import restriction will persist in 2019 (Mao Jun 毛隽 Jinying Capital coal analyst)