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New UserTurkey set to increase sulfur cap on thermal coal usage: sources
31 Jan 2018
Turkey may raise the sulfur cap on thermal coal used by power utilities in coming months, a move that would open up the market to US exports, sources said Tuesday.
The new cap being considered would allow utilities to import thermal coal with a sulfur content of up to 3%, the sources said. The current level is 1%-2%, depending on specific utilities' allowances.
Turkey's ministry of energy and natural resources was not available for comment.
A Colombian material sell-side source said he was concerned as Turkey has been a sizable market for him and the new cap would hand business to higher sulfur, and thus cheaper, US material.
Turkey imported 29.4 million mt of thermal coal in the first 11 months of 2017, of which 51% was Colombian origin and 41% Russian, customs data showed.
A Switzerland-based trader said one of the largest Turkish power utilities -- which has been blending Colombian material with Russian -- had halted purchasing until the decision was made as it may be able to blend with high sulfur US coal.
The source said the utility will be able to switch production to allow higher sulfur coal usage within a year.
A Turkey-based consumer said there was potential for prices to be affected as an influx of higher sulfur material from the US would lower the seaborne price.
S&P Global Platts assessed the weekly CIF Turkey 6,000 kcal/kg NAR 90-day price at $103.50/mt Friday.
Source: platts.com