Australia’s strong China coal exports exhausted quotas, justifying ban, but politics also at play, analysts say
- Australia became the largest exporter of coking coal to China in the first half of the year due to its post-coronavirus infrastructure and property building boom
- Australian thermal coal exports to China have been resilient due to a rebound in Chinese power generation despite the exhaustion of import quotas
Australia’s strong coal exports to China this year justified a reported import ban as it has exhausted its quotas ahead of other countries, commodities analyst S&P Global Platts said, although political reasons for the ban were not out of the question.
In the first half of the year, Australia raced ahead of other nations to become the largest exporter of coking coal to China due to a strong rebound in steel production used to supply the country’s post-coronavirus infrastructure and property building boom.
“Platts Analytics believes part of any rationale for a potential ban on Australian coal imports by China is not only political, but also due to the year-on-year increase in Australian coal exports to China so far this year,” said Matthew Boyle, senior coal analyst at S&P Global Platts.
Australian thermal coal exports to China have also been resilient due to a rebound in Chinese power generation despite the exhaustion of thermal coal import quotas at some ports as early as April, S&P Global Platts explained.
This is also the justification for maintaining coal import quotas, and not allowing imported coal to displace domestic coal