China’s state planner has reportedly allowed three central government-backed utilities and its top steelmaker to resume coal imports from Australia.
Key points:
- The relaxation of the coal ban has not yet been confirmed on the record
- Beijing imposed restrictions on the importation of Australian coal two years ago
- Australian coal had previously accounted for nearly 30 per cent of China’s coal imports
The partial easing of the coal import ban is the first since Beijing imposed an unofficial ban on coal trade with Canberra in 2020.
It comes after the Australian and Chinese foreign ministers met last month seeking to reset the frosty diplomatic relations between the two nations.
The National Development and Reform Commission (NDRC) summoned China Datang Corp, China Huaneng Group, China Energy Investment Corporation and China Baowu Steel Group on Tuesday to discuss the resumption of coal imports from Australia, two people familiar with the matter told Reuters.
The firms will be granted permission to purchase Australian coal only for their own use, the sources said.
The NDRC did not respond to a request for comment. The four companies named did not immediately respond to a request for comment outside office hours.
China imposed restrictions on Australian commodities including coal and wine just over two years ago after relations between Beijing and Canberra soured over political and public health matters.
Australia used to be the second largest coal supplier to China before the ban, accounting for nearly 30 per cent of China’s coal imports or more than 70 million tonnes of supply. Chinese buyers favour high-quality thermal coal and coking coal.
“Some [Chinese] traders have started to ask for prices of the February cargoes after the NDRC meeting,” one of the people said, adding that the current Australian coal prices are still attractive to Chinese buyers.
Australian thermal coal with heating value of 5,500 kilocalories was traded at about $US135 ($198) a tonne on a free-on-board basis as of January 3, and is assessed to be traded at around 1,150 yuan ($245) a tonne when reaching China.
That would be slightly cheaper than China’s domestic coal prices of about 1,200 yuan, traders said.
China’s most-active coking coal futures delivery closed down 2.32 per cent on Wednesday in anticipation of increasing supply from Australia.
Baoshan Iron & Steel, a listed subsidiary of Baowu Group, last month told a Shanghai Stock Exchange investor platform that “importing Australian coal will have a positive effect on the company’s coal procurement and structure adjustment, and will lower the logistic costs at our Zhanjiang base”.
Reuters
