From Hellenic Shipping News, December 16:
Like all trade wars the David v Goliath fight between China and Australia is morphing into a lose/lose game of point scoring with China trying to humiliate its smaller target only to see Australia skip away unscathed, so far.
What started with China banning the import of Australia barley and other farm products has been ratcheted up with the imposition of punitive tariffs on wine and a formal ban on Australian thermal, or electricity-producing, coal.
The net result of China’s tariff attack and import bans has been totally negated by a sharp rise in the price of Australian iron ore, causing the Chinese Iron and Steel Association (CISA) to cry foul and call for government intervention.
The problem for CISA is that iron ore is sold in an open market which China helped create when it dismantled the decades old annual price and tonnage setting system developed between Australia and Japan.
An open market, which includes trading on Chinese commodity exchanges, was supposed to provide greater pricing transparency for a commodity previously set in meetings between miners and steel mills dubbed “the mating game”.
Coal Prices Fall ….
Having started a trade war with one of its major commodity suppliers China is now discovering that it’s not the only customers for Australia’s exports with ANZ Bank noting earlier today that while the ban had a short-term detrimental affect on thermal coal prices the decline was now being reversed.
According to the bank the price of coal exported from Australia’s major thermal coal port of Newcastle fell nearly 15% to about $53 a ton in October while Indonesia coal prices rallied.
“However, as Chinese buyers adjusted their sources other markets tightened up,” ANZ said....
....MUCH MORE
Funny how that works.
