The Impact on Australian Coal Industry Continues! Australian Officials: Xiamen Port and Bayuquan Port Refused to Purchase Coal

According to the data released by the Australian Bureau of Statistics (ABS) in this January, China's coal imports from Australia set a new record of zero. Before China's ports resuming, Australian port management officials pointed out that Xiamen and Liaoning ports did not buy any  coal from Australia in February, and it is expected that they will also refuse to purchase coal in March due to unofficial ban, which has forced the industry to face continuous impact.

In view of China's ban on the import of Australian coal, Chinese buyers have delayed the down payment. According to shipping data, in this February, two ships carrying 75,000 tons of cargo sailed from Newcastle Port in New South Wales to Bayuquan Port in Liaoning Province and Xiamen Port in Fujian Province.

Australian officials predicted that the unofficial ban will be lifted so that some Chinese buyers may place new orders with Australian at the beginning of this year. However, as the ban continues to be enforced, these goods may be transferred to other countries later.

Since the verbal ban was imposed in last October, Chinese ports have not cleared the Australian coal that arrived a few months ago. A trader in North China pointed out that about 7 to 8 batches of Australian coal are still waiting to be unloaded at Bayuquan Port. He also estimated that a total of 3 million tons of Australian coking coal and no more than 5 batches of thermal coal are waiting to depart from Chinese ports.

Another North China trader said to Argus of Australia: ""According to the current situation, I don't think any Chinese buyer would dare to book new goods in Australia. There is no indication that China will lift the trade ban in the short term. "

Market participants close to the Chinese customs authorities also explained that the Chinese customs had not withdrawn the charge against Australia after enforcing the ban. He added, however, the authorities may have released some Australian coal, which had been placed in the bonded warehouse of the port long before the ban was issued. They just want to clean up the space. This can also explain that China's official import data in November 2020 showed that there were 406,000 tons of Australian coal.

It is noteworthy that in the months before this February, China allowed some Australian coal to be unloaded at Chinese ports, but this was regarded as a humanitarian action aimed at releasing the crew on board, rather than resuming the coal trade between the two countries. All the unloaded coal remains in the port now and has not been cleared by Chinese customs.

The growth of China's demand enabling South Africa surpassing India as the largest coal market. According to export data, South Africa exported 1.25 million tons of coal to China in this February, higher than the zero coal import in last February and 330,000 tons in last January. China's power companies have made continuous efforts to obtain sufficient supply of bituminous coal from other countries such as South Africa. Previously, due to stricter restrictions on trace elements, China temporarily stopped importing coal from South Africa, thus hitting the country's coal supply.

According to the trade data from Australian Bureau of Statistics, Australia's thermal coal exports fell to 15.77 million tons in January, lower than the previous forecast of 18.01 million tons. Since July last year, the export of thermal coal from Australia to China has dropped significantly. The transportation volume has decreased by nearly 50% from the average monthly 4.3 million tons from January to June last year, and dropped to a long-term low of nearly 200,000 tons in last December, and then completely dropped to zero in this January.

Australia not only faces the loss of the Chinese market, but also has difficulty in transferring the market. Although the major market shares in Japan and Asia-Pacific increased slightly in January, it was obviously unable to make up for the loss in China. The average export price of Australian thermal coal in January was 66.95 USD/ton, which is the largest monthly average export price since September 2019, when it was 68.84 USD/ton.