Mubasher: Several coal traders in China handling US imports have started to take on future supplies from local providers while awaiting last delivery of US coal, news reports said.

These reports came as the US said it would levy new tariffs on $16 billion word of Chinese goods starting Thursday, to which China vowed retaliation through further tariffs on a similar volume of US imports, including coal, metal, and fuel.

Shanghai Runhei International, a major local coal trader, cleared its last US metallurgical coal shipments at Qinhuangdao port earlier this week, a top manager told Reuters. “We have completely stopped US metallurgical coal, which is popular among steel mills, in late July,” [given] the increasing uncertainty surrounding trade, he said.

The shipments due for August delivery were booked last May after Beijing threatened to slap coal imports with hefty duties.

Shanghai Runhei said it would ramp up domestic coking coal purchases instead of foreign supplies to fulfil client demand.

At least six shipments of US coal are expected to arrive this month to China, whereas at least three were still on their way or waiting off-port to unload cargo, Thomson Reuters' Eikon shipping data revealed.

Chinese demand for US coal has grown this year, as traders looked for alternative supplies after Australian coal prices hit a six-year high last July.

“Traders have anticipated yuan depreciation and shored up imports in advance, including cargoes from the United States,” Huaan Futures coal analyst Wang Fei told Reuters.

He added that traders could "easily shift their supplies to either domestic coal or Australian and Indonesian coal" since US coal imports form a small portion in that industry. However, some Chinese buyers hope to exploit the trade war as a bargaining chip to source cheaper coal from the US.

However, state-run utility Guangdong Yudean Group asked US coal miners to give a discount on prices after the trade row escalated. The request was denied, a source told the news agency.