“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.

“We have been saying for many months now that Chinese coal import quota restrictions will be enforced.

“We believe China is trying to encourage domestic buying of coal to help stimulate the economy despite the large differential in domestic and seaborne prices. This is also the justification for maintaining coal import quotas, and not allowing imported coal to displace domestic coal.”

Quotas are crucial in the protection of the complex and volatile Chinese coal industry, and bans were mostly pragmatic rather than political, said veteran Australian trade expert Ian Davies, who previously worked with the industry’s regulator, China’s National Development and Reform Commission (NDRC).

The NDRC introduced an unofficial flexible annual coal import quota of 270 million tonnes to 300 million tonnes in 2017 that was issued on a monthly or quarterly basis at the provincial and port level through China Customs, he said.

The annual import quota is determined in consultation with the China Coal Industry Association through an analysis of coal supply and demand markets and inventory trends to create a domestic coal price that will help coal producers operate profitably.

In the first eight months of 2020, China had already imported 221 million tonnes of coal, which made up at least three quarters of the annual quota, and of this, Australia provided a record 32 per cent, Davies added.

“As imports approached the annual quota, it appears that China began to slow its imports for the final four months of 2020, and most recently Australian and Indonesian suppliers were requested to delay or divert contracted supplies originally earmarked for the China market,” he said.

But even if formal bans were introduced, S&P Global Platts said Australian exports in 2020 would be largely unaffected. But next year might be different, with exporters likely to lose trade in thermal coal in the first quarter of 2021, Boyle said.

Consultancy firm Wood Mackenzie flagged to its clients in May that a ban on Australian coal exports was imminent, but said the restriction would have little impact on the market.

On Thursday, Australian-listed coal miner Whitehaven Coal released its production report, and explained bans are standard commercial practices within coal exports.

“There has not been any official confirmation by the Chinese authorities on these newly reported coal import restrictions nor have there been any announcements of changes to the annual coal import quotas. Chinese steel production and steel pricing has risen strongly since the end of golden week [holidays],” the miner said.

But on Wednesday, Australian mining giant BHP Group said its Chinese customers had begun asking for deferrals of coal orders.

“We understand there may be some new developments relating to how China plans and moderates imports versus their own domestic coal production,” company chairman Ken MacKenzie said.

“It would be concerning if the rumours are true regarding an import restriction for Australian coal into China.”