In the ferocious ongoing trade war China quietly triggers another trade demarcation. This time its for coal imports in China.
It has been heard that in an offer China has instituted unofficial restriction on coal imports in support of domestic coal miners of China. The move deeply hurts the business of Aussie coal miners which were expecting thermal coal demand from China to go beyond the anticipation this year.
China officially remains silent on the move. The changes have been instigated through bringing down the pace of custom approvals at China’s key ports. Street Talks heard that several vessels have been send back by China and many stays at halt off China’s coast, waiting to offload the thermal coal imported from Australia and other parts of the world.
The plan of stopping the entry of coal from outside the boundaries of China is said to be in favour of China’s local miners who barely enjoy any price advantage in the coal industry. It was because imported coal has been giving a tough fight to China’s domestic coal players.
After Japan, China is the biggest importer of Australian thermal coal. The reports revealed that Australian miners had no prior information of the restriction imposed by China on seaborne thermal coal imports in the Key ports of its southern and eastern provinces.
The strong trends were seen in the Australian coal imports by China since the start of 2018, driven by significant demand for hydro-electric generators’ output. But these unforeseen trade restrictions by China have not only slashed the sales of Aussie coal miners but rather it has also forced the burden of additional transportation cost and massive overdue fees on delay in shipment.
This measure seems to ignite the fire upon the burnt ashes of the United States’ tariffs imposed on US$200 billion worth of Chinese goods. However, China has been seen bringing the similar measures earlier as well. But since domestic supply and competitive prices could not meet the raising demand for coal during winters, China lifted those restrictions later.
Executive level people of the coal industry have been heard saying that Chinese buyers are more price sensitive than Japanese and Taiwanese. Also, it has been said that coal demand in the next six months would be governed by the intensity of winters in the countries of North Asia.
With this news hovering around the corners of the world, Australian coal miners have been spotted in red today, 27 September 2018. BHP Billiton Limited (ASX: BHP) was down by 0.058% to $34.480, Rio Tinto Limited (ASX: RIO) slipped by 1% to $79.230 and South32 Limited (ASX: S32) dropped by 0.765% to $3.89 and Fortescue Metals group Limited (ASX: FMG) was down by 1.741% to $3.950.
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