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Chinese companies give “verbal notice” to stop Australian coal imports

The move has raised concerns that Australia could be at the top of another trade blow as relations with China have deteriorated in multiple diplomatic disputes this year. As the Chinese Communist Party stimulates the economy and at the same time increases investment in renewable energy, Australia’s coal restrictions will squeeze $ 14 billion in coal exports each year, boosting local miners in China.

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A Chinese coal industry source working for a state-owned enterprise said Sydney Morning Herald And Era A government meeting with industry at the end of September “decided to strengthen control of imported coal,” but the official notice was “market gossip.”

“Australia’s coal will certainly be tightly controlled if it is discriminated against among the largest coal exporters to China, such as Mongolia, Indonesia and Australia,” they said.

“Australian coal will face the most difficult problems during all foreign customs clearance.”

Australia’s coal imports were hit earlier this year after China’s National Development and Reform Commission instructed utilities in May to postpone purchases to raise local steam coal prices. Coal prices in China can be up to 60 percent higher than in Australia.

Australia is China’s largest supplier of thermal coal, supplying up to 35 percent of the minerals used to generate electricity. Australia’s exports of coking coal used to make steel surged 67% in the first half of 2020 as China embarked on an infrastructure to lead its recovery from the coronavirus.

Vivek Dhar, a commodities analyst at Commonwealth Bank, said China’s move to limit coking coal has focused on expanding restrictions across Australia’s coal industry, which was previously limited to low-priced steaming coal exports. He said it was a measure.

“It will affect all Chinese imports from different countries, but they can manipulate that policy of further damaging certain countries, saying Australia is the first victim. Our view, “said Dahl.

China relied on Australia’s coking coal to drive its surge in steel production in 2019, when logistics hurdles squeezed supply from Mongolia.

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“But given that Mongolia is back online, it’s time to target Australian coking coal,” Dahl said.

The recent surge in global coking coal prices and the expected increase in orders from major importers from South Korea, Japan and India will ease the blow to Australian producers, Dar said. “It’s the heat industry that feels pain.”

The limit could also flow to the federal budget, which assumed last week that coking coal prices remained at $ 108 ($ 149) per ton and steam coal remained at $ 51 per ton.

Eryk Bagshaw is a Chinese correspondent for The Sydney Morning Herald and The Age. Due to travel restrictions, he is currently based in Canberra.

Mike is a climate and energy correspondent for The Age and The Sydney Morning Herald.

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Chinese companies give “verbal notice” to stop Australian coal imports

Source link Chinese companies give “verbal notice” to stop Australian coal imports

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