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No signs of thawing in coal ties as China suffers freezing winter

Friday, January 8th, 2021

Amid its coldest winter since 2013, China shows no sign of thawing its coal impasse with key supplier, Australia. Beijing’s insistence on avoiding Australian coal is leading to blackouts in many parts of China over the past fortnight.

Relations between Canberra and Beijing have soured in recent months after Australia called for international probes into the origins of the Covid-19 pandemic, leading the government of Xi Jinping to ban a range of Australian products including coal.

Remarkably it has emerged that there were no coal shipments bound for China from two major Australian ports, Gladstone and Newcastle, throughout the whole of November and December, and no sign that China is relenting on the issue in the first week of 2021.

New figures from the Australian Bureau of Statistics on Thursday showed Australian coal exports to China plunged from more than A$823.3m ($640m) in November 2019 to A$121.7m in November 2020.

The trade tension also sees around 80 ships and more than 1,100 seafarers stranded off China’s coast.

“China’s thermal coal market is in chaos, with prices rocketing after daily price index releases were suspended on 3 December,” research firm Wood Mackenzie said in a recent report.

The report said power rationing “has already commenced” in Hunan and Zhejiang provinces due to the shortages, and there is “little scope” for increased production from Chinese producers.

“Trade flows will shift, as Australian coals look for new homes and higher volumes of non-Australia coking coals move to China,” Wood Mackenzie predicted.

China’s import data is showing increased coal imports from Mongolia, Canada and Russia to make up for the lack of Australian coal.

https://splash247.com/no-signs-of-thawing-in-coal-ties-as-china-suffers-freezing-winter/
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