China to Consider Plans on Removing Export Tax on Coal
China being the top producer and consumer of coal is thinking of scrapping the ten percent tariff on the exports of steam coals starting next year in the efforts to re-balance domestic supplies. If the plan pushes through the will increase seaborne coal supplies in the Asia Pacific market which threatens the Australian market share since they are the key supplier for Japan and South Korea and other countries in North Asia
Related government departments will be looking if it is necessary to remove the tax for coal export by next year. Still the Chinese government will still manage coal exports based on a annual quota system which covers four major firms namely Minmetals Group, China National Coal Group, Shenhua Group and the Shanxi Coal Import and Export group which all have an export license. First introduced in 2004 the quota system was created and adjusted to match the domestic supply and demand of coal.
By removing the export tariff the competitiveness of Chinese coal will be boosted and is likely to regain its market share in Asia. Analysts are saying that based on the current prices, removing the export tax will make the price at par with Australia.