The Guardian, October 12, 2020
Industry news sources report that Beijing has told several state-owned steelmakers and power plants to stop imports with immediate effect. China’s customs authorities have told several Chinese state-owned steelmakers and power plants to stop importing Australian coal, according to two industry newswire services.
The move comes amid ongoing tensions in the relationship between China and Australia and reportedly affects both thermal and coking coal.
The trade minister, Simon Birmingham, said the government was aware of the reports and was discussing the issue with Australia’s resources industry, which had “previously faced occasional disruptions to trade flows with China”.
“Australia will continue to highlight our standing as a reliable supplier of high-grade resources that provide mutual benefits,” Birmingham said.
The Minerals Council of Australia said it was also aware of the reports but played down any extended impacts, insisting the outlook for Australian coal “remains positive” in the medium term.
S&P Global Platts, which covers energy and commodities markets, cited several unnamed sources as saying Chinese state-owned utilities and steel mills had received the verbal notice to cease the imports “with immediate effect”.
Similarly, Argus Media reported that the order applied to at least some of China’s state-owned steelmakers and power plants – although the publication added it was also aware of some operators that were yet to receive the notice.
Argus cited a Singapore-based trader as speculating that this “might be a case of tightening import quotas rather than a complete ban”.
When contacted for comment, the MCA’s chief executive, Tania Constable, told Guardian Australia she was “aware of trade media and analyst comments on these matters”. “The trade with China changes through the year based on a range of factors, including quotas,” she said. “Australia will continue to see demand for its high quality of coal and the medium-term outlook remains positive.”
If confirmed, the move would be another sign of the deteriorating relationship between Australia and its largest trading partner.
China has taken a range of actions against Australian exporters this year, including imposing prohibitive tariffs on barley, suspending imports from five red meat processing plants and launching two trade investigations into wine.
By extending its trade actions to coal and iron ore, China could intensify economic pressure on Australia, which has insisted it won’t be deterred in standing up for its values.
The Australian government infuriated China with its early and vocal calls for a global independent investigation into the origin and early handling of the coronavirus – a step Beijing took as being aimed against it.
Government figures show Australia exported $7.3bn of coal to China in the first six months of this year – up 8% compared with the same period last year. The value of Australian exports of iron ore and concentrates to China rose 16% to $43bn.
Comment has also been sought from the Chinese embassy in Australia.
The MCA has previously told Guardian Australia that the resources sector was working to ensure the positive relationship continued but that Covid-19 had had a big impact on energy and steel demand globally.
Constable said about a month ago that the drop in energy and steel demand, including in Asia, had “flowed through to depressed thermal and to a lesser extent metallurgical coal demand”.
S&P Global Platts reported that the entities told to cease importing Australian coal had included Huaneng Power International, which describes itself as one of the largest listed power producers in China.
They also include Datang International Power Generation Company, another large state-owned power producer; Huadian Power International, a big power producer in the coastal province of Shandong; and Zhejiang Electric Power Co Ltd.
The timeline for the coal ban remains unclear.