New Coal Tax Rate Will Not Boost Coal Prices

The newly revised "Provisional Regulations on the Resource Tax of the People's Republic of China" was formally announced and will be implemented on November 1. For the adjustment of the coal resource tax rate, experts said that they would not push up the coal sales price.

Compared with the "Provisional Regulations on Resource Tax" that was implemented since 1994, the content of the coal industry has been revised. The revised tax rate is the coking coal resource tax rate raised to 8 yuan to 20 yuan per ton, and other coal. Without adjustment, it is still charged at RMB 0.3-$5 per ton.

China is the world's largest consumer and importer of coal, and it is also the largest consumer and importer of coking coal. Data show that in 2010 China produced and consumed about 3.5 billion tons of coal, of which coking coal accounted for more than 1 billion tons.

It is understood that the main reason for the rapid growth in the demand for coking coal is the sustained and rapid growth of China's economy. In particular, the “multiplier effect” of investment in fixed assets directly drives the demand for steel and coke.

At present, the proved reserves of coking coal in China are 280.3 billion tons, accounting for 23% of the nation's coal resource reserves, of which the scarce coal such as fat coal and coking coal only account for 12.81% and 23.61%. However, in recent years, the scarcity of coal has been severely disordered and over-exploited. Under this background, the state has implemented protective development policies for special and scarce coals. Therefore, adjusting the tax rate is considered to be a measure of protective development for increasing coke coal taxes. one.

“From the newly revised provisional regulations, it can be clearly seen that the resource tax rate charged for general coal varieties is still charged at 0.3 yuan to 5 yuan per ton, which will not increase the cost of coal production. The obvious reason for the increase in coal prices due to taxation is that There is no reason," said Li Chaolin, a market observer for the China Coal Transportation and Marketing Association.

“Although the country’s largest coke production base in Shanxi has a continuously decreasing share of coke production in the country, from 32.9% in 2003 to nearly 21.9% in 2010, the national coke production in 2010 was approximately 388 million tons, an increase of 9.1% year-on-year. The new history has directly promoted the demand for coking coal,” said Li Chaolin. At the same time, the rapid economic recovery of the international society has also increased the demand for coking coal, especially the growing international demand of countries such as India. “In this context, China’s energy demand will continue to be tight. As the main raw material for the steel industry, coking coal prices will remain at a high level and it is unlikely to drop significantly.”