China's coal imports rose in November for a second consecutive month, climbing 6.8 percent on the year, boosted by higher coking coal shipments on the back of increased steel production and more arrivals of steam coal for winter. Imports in November jumped 40 percent from October to 23.58 million tonnes, taking shipments in the first 10 months of the year to 205.5 million tonnes, up 27.7 percent from the same 2011 period.
The hike in November arrivals from a month ago was helped by a spike of 60 percent in coking coal imports that reached 5.81 million tonnes, from 3.6 million in October, official customs data showed on Friday. Traders said dwindling inventories, cheap overseas prices, rising steel production and an improved economic outlook for China, the world's top steel producer, have encouraged mills and traders to restock.
Thermal coal arrivals were up 4.57 million tonnes in November from the preceding month, thanks to a fall in regional prices that made imports more attractive than domestic supplies, traders said. "The import arbitrage was open for most of October and there were quite a lot of transactions done then. But some of the November arrivals were also shipments that had been delayed from the third quarter," said a Shanghai-based trader.
Although colder weather tends to drive up coal imports, some industry participants expect volumes to remain largely flat for a couple of months, reflecting limp demand in China since late November. "Sales have slowed down since November because port stocks were climbing and domestic prices started to fall, which sent a weak signal to the market," said a Beijing-based trader.
Combined coal stocks at China's four major Bohai Sea ports stood at 17 million tonnes on Sunday, down 1 percent from a week ago, data released on Monday by Qinhuangdao Port showed. However, in a sign that domestic demand remains fragile, Chinese steam coal prices slipped 3 yuan to 635 yuan per tonne on the Bohai Bay index.
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