As much as US$500 million of Australian coal sits on ships off China’s coast as spat between nations shows no sign of easing

More than US$500 million worth of Australian coal is on ships anchored off Chinese ports, as a diplomatic spat between the two countries cuts into trade, idles a portion of the world’s dry bulk carriers and threatens to spiral into a humanitarian crisis.

More than 50 vessels have been waiting a month or longer to offload coal from Australia, according to separate analyses of shipping data conducted by Bloomberg and data intelligence firm Kpler. There’s about 5.7 million tons of coal and approximately 1,000 seafarers on the anchored vessels, which are mostly Capesize and Panamax-sized vessels, according to Kpler.

Recent trade measures taken by China were made to protect public health and are consistent with World Trade Organization obligations, Wang Xiaolong, director general of the Ministry of Foreign Affairs’ International Economic Affairs Department, said Monday in Beijing.

The ban on Australian coal has happened in tandem with a broader push to restrict imports of the fuel, a common tactic Beijing uses to prop up domestic coal prices and support local mining companies. China’s monthly coal imports recently fell to the lowest in nearly a decade, according to Wood Mackenzie.

But authorities may grant additional import quotas to keep a lid on prices as peak winter demand draws near. The benchmark Qinhuangdao port price has risen back above the intervention level of 600 yuan (US$91.16) a ton this month, as efforts to increase domestic production fall short because of mine accidents in key provinces. Selected ports could get about 10 million tons of extra quota through the end of the year, Morgan Stanley said in a note Monday, citing traders and local media reports.