Australia investigating reports that China has halted coal imports

A general view of a Australian flag is seen during a welcome ceremony for Australia’s then Prime Minister Julia Gillard outside the Great Hall of the People on April 9, 2013 in Beijing, China.

Feng Li | Getty Images

Australia is investigating media reports that China has stopped taking its coal shipments, Australia’s trade minister said on Tuesday, playing down a potential sign of escalating trade tensions between the two countries.

Speaking on breakfast television, Trade Minister Simon Birmingham said the government was seeking a response from China while noting that coal flows to the country had been disrupted in recent years partly due to Chinese “domestic factors.”

Diplomatic relations soured in 2018 when Australia banned China’s Huawei Technologies from participating in its nascent fifth-generation (5G) broadband network. Australia’s call for an independent inquiry into the origins of the novel coronavirus – which first emerged in China – further angered the government in Beijing.

On Oct. 8, trade publication IHS Markit reported that authorities at ports in Bayuquan and Jingtang in northern China and Fangcheng in the south had told buyers that Australian cargo would be rejected from discharge and clearing, effective Oct. 1. China’s “Golden Week” public holiday spanned Oct. 1-7.

“We’re talking to the coal industry there and seeking assurances from China in relation to these matters but our coal remains an important part of our export mix and certainly a very reliable energy source for a range of countries across the region,” Birmingham told broadcaster Channel 9’s Today Show.

China is the biggest importer of Australian coal, taking 27% of its metallurgical coal in the year to June and 20% of its thermal coal. Coal was Australia’s second-largest export last year, behind iron ore, worth A$55 billion ($39.52 billion).

China was already expected to tighten coal import rules in the second half of 2020 to support its domestic industry, traders and analysts told Reuters in May, after record arrivals in the first four months of the year met tanking demand brought about by the coronavirus outbreak.

Analysts forecast imports to fall by a quarter this year from last to about 80 million tonnes.

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