China’s unofficial restrictions on coal imports from Australia are having more than just an impact on miners down under, it’s hurting steel producers in China and helping those elsewhere.
Chinese authorities have now more or less confirmed what the market already knew, namely that they have placed what amounts to severe curbs on imports from Australia, the world’s largest exporter of coking coal used to make steel, and the second-biggest shipper of thermal coal used in power plants.
A Chinese foreign ministry spokesman indicated on Wednesday that “many” Australian coal shipments have “failed to meet environmental standards”.
It would be a challenge to find anybody in the coal industry who believes environmental standards are the real reason for China placing an effective ban on coal imports from Australia, but at least the spokesman has circuitously confirmed that the restrictions are indeed in place.
Since the unofficial ban was enacted in October, shipments from Australia have plunged, with Chinese imports of coking coal from Australia falling to 1.53 million tonnes in October, or about 26% of its total imports of the fuel.
That compared to a share of 30% in September and 78% in March, the highest level since at least 2018, according to Reuters’ calculations based on data customs data.
