Australia is ‘very upset’ by reports of a Chinese ban on its coal

12/15/2020 Business


Chinese Trade Minister Simon Birmingham said on Tuesday he was “deeply disturbed” by new reports in China’s state media that the country’s top economic planner had effectively banned the import of certain coal from Australia. The Global Times, a state-run tabloid, reported last week that the country’s National Development and Reform Commission has allowed foreign coal to be purchased – except for power Australia.

Birmingham Australia told Radio National of Australia that if this were true, the reports would indicate discriminatory practices deployed by Chinese officials. China has already banned or reduced tariffs on a range of other Australian Australian exports.

Asked by reporters on Tuesday about the reports, the Chinese Foreign Ministry pointed out the questions to “concerned officials”. But spokesman Wang Wenbin acknowledged that “Chinese authorities have recently taken relevant action against certain Australian Australian products exported to China in accordance with the law and regulations.”

Meanwhile, Australian Prime Minister Scott Morrison told reporters in Australia on Tuesday that the government was “seeking clarification” on the reports, adding that the country still had a hearing pending from the Chinese government. He said China is reportedly blocking Australian Australian coal “Bad outcome for trade relationship” between the two countries.
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Relations have been strained since April, when Morris called for an international investigation into the origins of the coronavirus epidemic. Beijing called the move “political manipulation.”

In the months that followed, China slapped Australian Australian winemakers with heavy tariffs, and banned or taxed exports of other products, including beef and barley.

Morrison said on Tuesday that Australia sends billions of Australian coal dollars to China each year, adding that Japan is a bigger market for exports than China. Thermal coal is mainly used to generate power. In the 2018-2019 financial year, Australia exported a total of 14 billion Australian Australian dollars (10.5 billion dollars) of coal.
But the impact of any action against Australian Australian coal on trade is difficult to determine. Australian Australian media pointed out weeks ago that millions of dollars worth of coal had already been seized off the coast of China, indicating that Beijing was at least informally putting pressure on Australia’s vital mining industry.

Sean Lang Langke, a senior economist at Oxford Economics, noted the current barriers to the thermal coal trade. “These are clearly not resolved, and it’s not hard to see this news as more of a waste.”

Australia Investors in Australia’s largest coal producers are taking reports as a bad sign. Shares of Coronado Global and Yankol Australia sank more than 8% in Sydney on Tuesday. Whitehaven coal went down about 6% on Tuesday and is down 10% so far this week.

Analysts at ANZ Research wrote in a research note that Chinese reports confirm “what has been believed since reports of an import ban on coal from Australia came out in October.” They noted that while China has been an important market for Australian Australian thermal coal – it accounted for one-third of Australia’s total exports in 2018 – the market share has been declining.

“Australian Australian exporters have gained additional buyers in South Korea, Vietnam and Japan,” analysts wrote. “Similarly we have seen Australia’s thermal coal exports improve relatively well despite Chinese restrictions.”

Economists note that other mining materials, mainly iron ore and coking coal are used in steel production, making up a particularly large share of Australian sterling exports. Langkek told CNN Business earlier this month that restrictions on such exports were not possible given how much China’s steel industry depended on them. (Iron ore prices are trading at year-high levels, in part due to rising demand as China recovers from the epidemic.)

– Angus Watts contributed to this report.

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