China to extend sulfur limitations for bunker fuels along entire coastline

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China is set to tighten its sulfur-limit restrictions for ships by extending the 0.5% bunker fuel sulfur limit from the initially designated Emission Control Areas (ECAs) to the entire coastline.

In view of the rising concerns over environmental pollution, tightening sulfur-limit restrictions is no surprise, a Beijing-based coal trader noted, adding that coastal shipowners will have to bear the brunt, and in turn, may be forced to raise coastal freights.

Meanwhile, rising coal imports may continue to pressurize China’s domestic coal market and subsequently the coastal coal freights market, a Shandong-based trade noted. That is, coastal shipowners may have to tread cautiously before hiking coal freights.

Despite the restrictive measures taken by the government, China imported 271 million mt of crude coal in the first 11 months of 2018, up 9.3% year on year, Platts had earlier reported. This will annualize at 296 million mt for 2018, up 9.2% from 271 million mt in 2017.

Since July 2017, second-tier Chinese ports (ports that are approved and supervised by provincial governments) have been restricted in their coal-import businesses, due to an effort by the government to curb the supply of coal into the domestic market, according to industry sources and reports by state-owned newspapers such as The Economic Observer and China Electric Power News.

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