China’s ban on Australian coal could be ‘indefinite’ amid heightened political tensions

Name: 16 miners killed, one rescued after fire in coal mine in Chongqing, China
Uploaded: 2020-10-12T20:15:08.000Z
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China has reportedly banned imports of Australian thermal and coking coal, leaving some Australian vessels stuck at Chinese ports

Analysts say the move is likely politically motivated, but aligns with China’s efforts to reduce pollution and consolidate the coal sector

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China’s ban on Australian coal comes amid deteriorating relations between the two countries. Photo: Reuters

Su-Lin Tan

Published: 4:15am, 13 Oct 2020Updated: 3:44pm, 13 Oct 2020

China’s ban on Australian thermal and coking coal imports, which has left several Australian vessels stranded at Chinese ports, is likely to remain in place indefinitely amid deteriorating trade ties between the two nations, analysts said.

Chinese authorities communicated the ban verbally, suggesting the informal approach was politically motivated, commodities analysts said, though it also aligned with tightening coal import quotas and Beijing’s goal to reduce consumption and carbon emissions.

Coal import quotas at some Chinese ports have now been exhausted for 2020.

“There are several vessels carrying Australian coal waiting at Chinese ports for more than a month now as generally custom clearances have been very slow,” said Deepak Kannan, a thermal coal analyst S&P Global Platts. “Indications from sources are that the number of vessels waiting at Chinese ports has increased quite a bit of late.

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16 miners killed, one rescued after fire in coal mine in Chongqing, China

“Some reports have suggested that as much as 7 million tonnes of coal are on board vessels waiting along Chinese coast, up from the usual 4 to 5 million tonnes normally seen during this period of time along the coast.”

State-owned utilities including Huaneng Power International, Datang International Power Generation Company, Huadian Power International and Zhejiang Electric Power were notified of the import suspension, S&P Global Platts said. One of the utilities cancelled an order for high-ash 5,500 kcal/kg NAR Australian coal.

The ban comes amid deteriorating trade relations between the two countries after Canberra called in April for an investigation into the origins of the coronavirus without first consulting Beijing.