China’s port fee cuts add to coronavirus response
China's government is suspending or reducing port fees and other transport costs, a move that is expected to help revive exports and imports as the country recovers from the coronavirus outbreak.
All port construction levies applying to imports and exports will be waived from 1 March to 30 June, while some other port fees, including port security charges, will be reduced by up to 20pc over this period, Chinese premier Li Keqiang said yesterday after chairing a state council meeting.
Charges for non-tanker cargo vessels will be cancelled, and the cost of railway insurance and fees on containers and freight cares will be halved by the end of June. The council is also examining road toll reductions to help the transportation sector hit hard by the coronavirus impact.
For commodities, the port fee reductions could reduce coal costs by 6.50 yuan/t, or about $1/t, coal importers forecast. The reduction may have limited impact on thermal coal demand.
The fee reduction will also reduce the cost of portside iron ore, which includes Yn25-30/wet metric tonne in port fees, potentially narrowing its differential to seaborne prices.
China's central bank has responded to the coronavirus outbreak with monetary easing, similar to other central banks, but yesterday's move is part of a more aggressive fiscal response than other regions, especially the US and the EU that have relied more on monetary easing to counteract the slowdown.
Chinese provinces and localities as of yesterday have announced planned investment of Yn2.79 trillion ($400bn) on projects for 2020. China's finance ministry pre-approved Yn848bn in local government bonds last month, which followed an accelerated rollout of provincial bonds at the start of the year.
China two weeks ago began allowing Chinese firms to apply for exemptions to import tariffs on nearly 700 products. Exemptions have been approved for LPG and petroleum coke, and are anticipated for coking coal, lifting spot trade.
Beijing also announced tax relief for affected industries including value-added tax exemptions for people working in transportation, tourism and delivery services.
The policy response and expected rebound in demand have supported ferrous markets.
Seaborne iron ore prices, an indicator of the biggest components of China's economy — manufacturing and construction — have erased most of the sharp falls that occurred when the outbreak took hold. The Argus ICX 62pc seaborne fines index fell by more than $15/dry metric tonne (dmt) to $80/dmt cfr Qingdao from 22 January-5 February, but has since recovered most of that, rising by $2.90/dmt to $90.40/dmt today.
Increased demand has also supported prices for the other main raw material for steel — coking coal — with prices for premium low-volatile hard grades up by $24.55/t, or 16pc, to $175.70/t cfr China this year.
source: Argus Media
Top News
Six last month
MinRes halts Bald Hill mine amid lithium price rout
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Gold price faces worst week since 2021 as Fed signals no rate-cut rush
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Swapping aluminum for copper will maintain China’s resources, group says
Gold loses some luster after Trump’s decisive win
Hedge funds slash bullish wagers on gold over Trump election win
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Families gather at South African mine shaft where hundreds are feared stuck underground
BHP to spend up to $14 billion on Chilean copper expansion
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
China’s germanium, gallium ban could cost the US $3.4 billion
South Africa police standoff with illegal gold miners escalates
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Resolute Mining says it will pay Mali $160 million in tax dispute
Trump chooses oil fracking boss as energy secretary
Gold loses some luster after Trump’s decisive win
