Turkey's Ministry of Environment has ratified the government's motion to increase the sulfur cap on imported thermal coal and the process has moved on to the Ministry of Economy, market sources said Wednesday.
The exact timeline of events is unclear due to no official communication from either ministry, but sources said the approval took place within the last week or so.
The Ministry of Economy wasn't immediately available to comment on the matter.
The new cap being considered would allow utilities to import thermal coal with a sulfur content of up to 3%, sources said. The current level is 1-2%, depending on specific utilities' allowances.
"I have no doubt this [higher sulfur cap] will happen," said one Europe-based trader, adding that this recent step is a positive move for increasing the sulfur cap.
Sources said they remain confident that, if the final decision goes ahead, this will open up the import market for high sulfur, high-CV US coal, excluding Colombian coal, currently competing with Russian coal as a low-sulfur option.
A Turkey-based consumer said they had heard unofficially that the decision was supposed to be taken before the end of H1 2018, but added that, owing to the nature of bureaucracy, it could take longer.
"It could be two weeks, or two months," said another Europe-based trader.
The source said owing to the lack of official communication from the Turkish government surrounding the decision; it has meant it is hard to get an exact timeline on the process.
The trader said it could be in the government's interest to pass this decision through as it will gain support from utilities in Turkey.
"It will change the dynamics of the Turkey import market for years," said the trader.
In 2017, Turkey imported 32.98 million mt of thermal coal, up 8.4% year on year with Colombian coal accounting for 51.4% of that volume and US coal less than 1%.
S&P Global Platts assessed the weekly CIF Turkey 6,000 kcal/kg NAR 90-day price at $89.50/mt Friday.
