Duty-free coal exports likely to affect global market

China's move to scrap the 40 percent tariff on coking coal exports and possibly lift the tariff on crude coal exports could affect the global coal market, according to the manager of a coal export company.

China's Ministry of Finance has announced that the 40 percent tariff on coking coal exports will be scrapped starting January 2013.

Wang Songtao, assistant general manager of Shanxi Coal Imports and Exports Group Co., said if the problem of excess capacity on the domestic market worsens next year, it is possible that the government will lift the 10 percent export duty on crude coal.

"Once this happens, China's coal exports could surge, and this could become a major factor affecting the coal market in the Asia-Pacific region and even the world," Wang said Friday at a coal trading fair held in Taiyuan, capital of coal-rich Shanxi Province.

"For example, an annual export of 20 million tonnes could break the supply and demand balance and drag down global coal prices," he said.