coal - China Port Delays Coal Imports from Australia

Customs at Dalian port in north China announced on Thursday (Feb.21) to bar coal imports from Australia and to set a quota limit on all its coal imports at 12 million tonnes towards the end of 2019, according to report by Reuters.

The ban on imports from global top coal supplier Australia went into force at the start of February has no definite end date, coming as major ports elsewhere in China delay to finish clearance procedure for Australian coal within more than 40 days.

China’s foreign ministry said the ban was unrelated to Australia’s relations with China, which have worsened since 2017, when Canberra accused Beijing of interfering in its domestic affairs, and but for the purpose of inspecting and testing coal imports to ensure their safety and quality.

“The goals are to better safeguard the legal rights and interests of Chinese importers and to protect the environment,” the ministry’s spokesman Geng Shuang told reporters at a press briefing, adding that the move was “completely normal”.

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Coal is Australia’s biggest source of export incomes and the Australian dollar depreciated by more than 1 percent to as low as $0.7086 amid concerns that the Chinese ban would drag its already decelerating economy.

Imports through Dalian port account for only 1.8 percent of Australia’s total coal exports, but if the reported ban reflects a more significant deterioration in the bilateral relations between Australia and China, then it could have a broader impact, said Ivan Colhoun, chief economist of markets at National Australia Bank, in a note on Thursday.

As Australian coal is not allowed for customs clearance at harbors overseen by Dalian customs, coal imports from Russia and Indonesia will not be affected, said the Dalian port official.

“I’m aware of unconfirmed and unsourced media reports and have asked our Ambassador in Beijing to urgently clarify their veracity,” said Simon Birmingham, Australia’s Minister for Trade.

In fact, Australia’s coal exports to China from October to December in 2018 were higher in both volume and value than in the same period of 2017, Birmingham added.

Customs data showed China introduced 28.26 million tonnes of coking coal from Australia last year, comprising 43.5 percent of the country’s total imports of energy resource.

It has been reported for long, however, China is trying to curb coal imports more generally in a bid to support domestic prices.

 

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