Speculation is growing that Mainland China will soon ban Australian coal, after several customers claimed the communist regime warned them not to place more orders.
A state-controlled utility in eastern China cancelled about 10 cargoes of Australian coking and thermal coal that were due for delivery in November and December because the ruling Chinese Communist Party (CCP) told staff to cancel the order. The cancellation was unusual since the utility had long-term contracts with the Australian mineral producer according to Argus Media.
No deal directive
Other utilities and industrial customers similarly confirmed with the publication that CCP representatives contacted them between October 1 and 8, and told them to immediately stop importing Australian coal. QMEB understands new orders will be made for coal sourced from Russia and Indonesia instead due to souring Australia-China relations.
It is unclear whether any previous Australian coal orders will be permitted through China Customs as a number of cargoes are experiencing either delays or defaults. Only a few have been permitted to unload their cargo at certain Chinese ports.
Quiet Christmas expected
Glencore Australia has already reduced output across a number of Queensland and New South Wales mines in recent weeks, and there is potential to suspend mining for an extended period in the Christmas and New Year break. This is understood to be in response to China’s stricter import rules and an international oversupply of thermal coal.
Although China’s Ministry of Foreign Affairs claimed it was unaware of any coal import freeze, Australian Trade Minister Simon Birmingham believes the shipment delays do warrant further investigation.
“I have seen the reports and we have certainly been in touch with the Australian industry,” he said according to the Australian Associated Press (AAP).
“We have also been working to seek a response from Chinese authorities in relation to the accusations that have been made publicly.”
China slams the door
However, the minister himself has been unable to reach Chinese Commerce Minister Zhong Shan for several months due to ongoing diplomatic tensions over the CCP’s earlier ban on meat imports from four Australian abattoirs and a new 80 per cent tariff on Australian barley.
“There have been patterns of things that look like there are some formal quota systems operating but we take the reports seriously enough to try and seek some assurances from Chinese authorities,” the minister said according to AAP.
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