Prices Fall as China Announces Import Levies

China import levies to start Oct. 15; Newcastle November coal down $1.10 at $64.50.

Thermal coal prices fell on Thursday after China announced it will impose a levy on coal imports from next week.

Australian cargoes for delivery from its Newcastle terminal in November were trading at $64.50 a tonne on Thursday afternoon, down $1.10 since their last close and near to five-year lows.

Cargoes for delivery in December were down $1.20 at $65.10 a tonne, while cargoes for January 2015 delivery fell 30 cents to $65.60.

China, the world's top coal importer, said it will levy import tariffs on the commodity from Oct. 15 in its latest bid to prop up ailing domestic miners who have been hit by rising costs and tumbling prices.

The levies of between 3 and 6 percent are China's first coal import tariffs for nearly a decade and are likely to hit Australian and Russian mining companies hardest.

"We've seen more South African coal coming to Europe, but Australian coal only really has China and India (as export destinations)," one coal trader said.

Traders said that Indonesia, the second-biggest shipper of coal to China, will be exempt from the tariffs because a free-trade agreement between China and the Association of Southeast Asian Nations (ASEAN) promises signatory nations zero import tariffs for some resources.

In Europe's physical coal market, cargoes for delivery in November to Amsterdam, Rotterdam and Antwerp (ARA) were valued at $71.25, down 5 cents on Wednesday's settlement.

ARA contracts for delivery in December were valued at $73 a tonne, but no European trades for either contract were reported on the globalCOAL platform by 1505 GMT.

"Slowing Asian demand continues to fail to support (coal) prices. Stocks are quite comfortable in Europe," Societe Generale (SGE.SG) analysts said in a research note published late on Wednesday.

Reporting by Susanna Twidale