China has suspended all imports of anthracite coal from North Korea, starting February 19, according to a statement published by the country's ministry of commerce on its website last Saturday, a move which could provide support for prices of the steelmaking raw material in both domestic and export markets.
In the statement, China's commerce ministry said that the suspension would be effective until December 31 this year.
The country imported 22.5 million mt of coal from North Korea in 2016, an increase of 14.5% from the year before, according to Chinese customs data.
The suspension comes on the heels of North Korea?s launch of a ballistic missile into the Sea of Japan this month.
The suspension includes all incoming North Korean coal shipments that importers had applied for but not yet received official approval, the Chinese ministry said.
Market participants commented that the suspension could tighten Chinese supply of low-volume pulverized coal injection (PCI), as well as boost demand for Russian and Vietnamese anthracite imports.
"PCI supply will be squeezed because that's 22 million mt [of output per year of] anthracite taken out of the market," according to a North China-based trader.
"North China mills that rely on North Korean anthracite may need to turn to Russia or Vietnam for replacements."
China also buys anthracite from Russia, Australia and Vietnam.
Anthracite is the least common of all coal types, accounting for less than 1% of the world's reserve. Carbon constitutes 86%-97% of anthracite, and this coal variety has only a slightly lower heating value than that of bituminous coal, according to a research by CLSA, a brokerage firm.
Anthracite's high heating value means that the raw material is most often used as a PCI product that is injected into the blast furnace during steel production.
The import suspension followed a restriction effected in November 2016 by the United Nations Security Council on North Korean export of coal to no higher than 7.5 million mt in 2017.
