Coal news and updates

China’s unofficial ban on Australian coal imports is resulting in shifting trade flows across the region’s energy sector, mining companies believe, as hope emerges for ship crews stranded at sea for months on end.

 

Introduced as part of a trade dispute between the two nations, China’s import restrictions made headlines after dozens of ships carrying coal from Australia were left stuck at sea for weeks or months, unable to offload cargo or change crew. The ban has never been officially confirmed by Chinese authorities.

 

Early signs are now emerging that the worst of the crisis could be over. Seafarers aboard several vessels – including Anastasia, whose crew recently reported an urgent need for medical attention – have been allowed to return home, as industry groups call for further action from shipping companies.

 

Australian coal exporters have this week told investors the future of this trade corridor remains highly uncertain, but that they are starting to find new export markets elsewhere in the Asia Pacific region.

 

Mining giant BHP acknowledges in its half-year financial results up to December 2020 that “uncertainty about China’s import policy towards Australian coals spiked” during that period, and that the industry “faces a difficult and uncertain period ahead”.

 

The company says it has written down the value of its coal assets by US$1.6bn, in part due to current market conditions and that China’s restrictions remain a key uncertainty. Chief executive Mike Henry told investors he is “certainly not banking on any near term resetting of that policy”.

 

However, BHP says demand for coal from outside China grew in late 2020, and adds: “Trade flows are adjusting to account for the available opportunities.”

 

Independent producer Whitehaven Coal, which does not export directly to China, also tells investors it has noticed an impact on the seaborne coal market.

 

“China’s restrictions have altered seaborne coal trade flows where, instead of being delivered to China, Australian coal is now finding customers in alternate destinations including India, Pakistan and the Middle East, and traded coal historically delivered into these markets is finding its way into China,” it says in its half-year results.

 

 

According to a paper by Fitch Ratings last month, coal exporters in Indonesia appeared to be the initial beneficiaries of fresh Chinese imports. It says that by January, the country’s coal index had risen by 73%, to US$45 per tonne, compared to the seven-month average up to November 2020.

 

The Australian Bureau of Statistics also says coal exports to South Korea, India and Japan increased by 48%, 38% and 27% respectively in December. That has “offset some of the fall” caused by a drop in exports to China, it says.

 

 

Source : https://www.gtreview.com/news/asia/australia