You are here

China's fuel exports to North Korea slow again, but coal imports return

[BEIJING] China's fuel exports to North Korea fell in August, along with iron ore imports from the isolated nation, as trade slowed after the United Nations' latest sanctions, but coal shipments resumed after a five-month hiatus, customs data showed on Tuesday.

China imported 1.6 million tonnes of coal from North Korea, according to data from Beijing's General Administration of Customs, the first since February, when Beijing banned purchases of the fuel from its north-east neighbour.

The release comes after data on Saturday showed China's trade with North Korea jumped in August even after the UN's latest sanctions targeted Pyongyang's exports of coal, iron ore, lead, lead ore and seafood.

Asked to explain the unexpected appearance of North Korean coal in the data, a customs official said he would refer the matter to the foreign ministry. A spokesman for the foreign ministry at a daily briefing said it would refer the issue to customs.

Market voices on:

Traders and industry experts said the shipments were likely stranded at port since Beijing's sudden prohibition of coal purchases in mid-February, but then allowed into the country ahead of the latest round of penalties against North Korea.

On Aug 14, China said it would allow any cargoes that were already at port to clear customs as usual before the UN sanctions came into force on Sept 5.

An experienced trader who handles coal from North Korea said his 5,000-tonne cargo was allowed through customs last month after being stuck at a Chinese port for six months.

He believes many or all of last month's unexpected imports were cleared under similar circumstances.

"My cargo sat at port for six months until customs sent a notice telling us they will let all North Korean cargos that have been unloaded at port clear customs," he said.

The volume of coal was similar to the monthly average for the six months before the Chinese government's ban. Its value of about US$140 million was in line with a jump in total imports from July.

It was equivalent of about 80 cargos of the fuel, based on trader estimate for the average shipment size.

Last month, the UN Security council unanimously imposed new sanctions on North Korea.

The sanctions took effect this month, but China enforced the new measures from Aug 15, amid growing pressure from the United States to rein in Pyongyang's missile programme.

China's gasoline shipments to North Korea were kept at a trickle at 180 tonnes, up slightly from July's 120 tonnes but down from almost 5,000 tonnes a year earlier. Diesel shipments were just 170 tonnes, compared with zero tonnes a year ago.

At the end of June, Reuters reported China National Petroleum Corp (CNPC) suspended sales of gasoline and diesel to North Korea over concerns CNPC would not get paid for its goods. The measures are still in place, sources familiar with the matter say.

Fuel prices in North Korea have surged in recent months, people familiar with the matter say.

Iron ore arrivals from North Korea were 143,343 tonnes in August, the lowest since December and down from 175,980 tonnes in July.

Imports were down 27 per cent on a year ago, according to customs' records.

Lead concentrate imports were 14,216 tonnes, the highest on Reuters' records going back to 2010, reflecting a scramble by smelters near the border to secure material ahead of the sanctions.