1) The environmental community was oohing and aahing over the Chinese CO2 pledge2) China gets to punish Australia for questioning the Covid-19 origin story3) As seen in the post on other industrial commodities, China may not have as strong a demand as it appeared last quarter.
From Lloyd's List, October 16:
While coal exports from Australia to China could be hit given the souring relations between the two sides, the situation could also present opportunities for the dry bulk market
Should volumes reduce from Australia, China will have to look farther afield for its coal supplies. The US, Russia and South Africa could be options, with higher shipments from Indonesia already emerging
WHILE coal exports from Australia are unlikely to be materially impacted this year from China’s reported ban, volumes in 2021 could be hard hit, according to pricing agency S&P Platts.
It estimates that up to 32m tonnes of thermal coal could be displaced in the first quarter of next year alone.
China could look to Indonesia for some volumes, but since Indonesian coal is of a lower calorific value than Australian coal, supplies from Russia or South Africa may be required, according to the agency’s senior coal analyst Matthew Boyle.
Despite China’s coal import quotas being exhausted at some ports since as early as April, Australia’s coal exports have held up, he said.
“Platts Analytics believes part of any rationale for a potential ban on Australian coal imports by China is not only political, but also due to the year-on-year increase in Australian coal exports to China so far.”
In the first eight months of the year, Australia exported 38.6m tonnes of thermal coal and 31.6m tonnes of metallurgical coal to China, which represents an increase of 4.6m tonnes and 8.5m tonnes, respectively, compared with the same period in 2019....
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And from News.au, October 18:
China’s ban on coal could cost Australia $15 billion a year
It’s a huge problem that doesn’t appear to be going away – and it could cost the Australian economy a whopping $15 billion a year.
In June last year, the people of Sydney woke to the unexpected sight of the Chinese Navy in the harbour. For some, it was a concerning sign that the Morrison government had perhaps allowed Australia to be pulled too far into Beijing’s orbit.
At the time Prime Minister Scott Morrison said the publicly unannounced arrival of the warships had been planned for some time and it was a “reciprocal visit” after Australian naval vessels had visited China.
Now, less than 18 months later, things couldn’t be more different between Canberra and Beijing, with diplomatic and trade relations seemingly continuing to deteriorate with each passing day....
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