China will cut its export tariffs for coal from January 1, 2015, after intense lobbying by the China National Coal Association. The lobbying follows a slump in coal prices which has put nearly 70% of the country’s miners in the red.

The country will also adjust tariffs for a range of other commodities as part of broad efforts to re-order trade and foster economic growth. However, with some sectors, such as coal and rubber, facing deep structural issues, analysts say the tariff adjustments will offer very limited support.

Despite the sharp drop in coal export taxes, experts say there is little risk of Chinese supplies flooding the Asia-Pacific seaborne market as domestic prices are significantly higher than those from major exporters Australia and Indonesia.

Export tariffs for all unprocessed coal will be cut to 3% from the current 10% in 2015, while the current 1% import tax for ferro-nickel and ferro-chrome will be scrapped, the Ministry of Finance said in a statement last Tuesday.

The cap for rubber import tariffs will also be lifted to 1500 yuan (US$242) a tonne, up from the current 1200 yuan - a revision that may dent imports from Thailand but also hurt domestic tyre makers. Experts say the upward revision to import cap value of rubber was likely aimed at supporting local farmers, but that will not reverse a broader trend where millions of rural residents abandon farming for better paid work in cities.

They also say that scrapping of the taxes for ferro-nickel and ferro-chrome is likely to further hit domestic nickel pig iron producers since many have already cut production on the back of weak domestic demand. Nickel pig iron is a cheaper substitute for ferro-nickel, used for making stainless steel.

The scrapping of import taxes will, however, help Chinese firms that have invested heavily in Indonesia to build ferro-nickel plants to skirt that country’s exports ban on nickel ore.