Australian coking coal is a key ingredient for China’s huge steelmaking industry. Picture: Bloomberg By WILL GLASGOW 2:01PM DECEMBER 14, 2020 https://www.theaustralian.com.au/bu...l/news-story/bf9c9a6dd483c34ca02a5508294abd6b Beijing has formalised its blacklisting of Australia’s $14bn annual coal exports to China at a high level meeting held over the weekend, deepening a crisis for one of the nation’s biggest export earners. The National Development Reform and Commission met with major Chinese power companies on Saturday to address a surge in coal prices in the world’s second biggest economy, according to state media reports. The Commission – China’s top economic planning agency – has not yet commented on the meeting, but reports by state-controlled media singled out the Australian coal industry. “China’s top economic planner on Saturday gave approval to power plants to import coal without clearance restrictions, except for Australia,” reported the Global Times. The state-controlled paper suggested coal producers in Mongolia, Indonesia and Russia would benefit from the change in policy, which attempts to calm soaring coal prices in China. Blacklisting Australian coal into 2021 would be the most costly strike in China’s wide ranging program of trade retaliation put in place after the Morrison government called for an independent inquiry into the origins of the coronavirus in April. There were market expectations the quota would be reset by January but the latest information suggests Australia faces an extended ban that could last through much of next year. The stoush has shown no sign of subsiding, with the amount of coal delivered to Chinese customers from Australia plummeting by 78 per cent in November to 1.4m tonnes. Citi analysts think China’s ban on Australian metallurgical coal may be lifted by mid-2021 with its steel mills forced to resume buying due to their reliance on high-quality Australian grades. But the move would take the total amount of annual exports blocked by port authorities, crippled by tariffs or banned by customs to more than $20b, following strikes against wine, wood, barley, beef, lamb and lobster. The Australian has previously revealed that more than 80 ships carrying Australian coal worth over $1.1bn were stuck off the Chinese coast unable to offload their blacklisted cargo. Much of that banned product is coking coal, a key ingredient in steel making. As well as hurting Australian coal producers, the coal ban has led to a price surge on the input costs of China’s steel making industry. “It can’t go on forever because they are really crippling themselves,” former trade minister Mark Vaile told The Australian in November. Metallurgical coal miners in Canada – like Australia, an American ally with strained relations with China - have benefited from the politically motivated trade restrictions. Canada’s Teck Resources, which produces about 26 million tonnes of high-grade coking coal from its mines in British Columbia, said late last month it was diverting spot cargoes to China to take advantage of short-term pricing. China’s steel making industry is also being hit by a rise in the iron ore price, as its second biggest supplier Brazil’s Vale last week said it was struggling to increase production levels. Australia supplies more than 60 per cent of China’s iron ore. Exports of the $85bn commodity have been untouched in Beijing’s eight month long trade retaliation campaign.
Biden's going to be busy fighting two cold war fronts (China and Russia). The Wuhan inquiry, south China sea, Uighur, and Hong Kong abuses are totally acceptable points of contention and should be backed by the rest of the G-20 w/threats of sanctions if not complied with. The US should strengthen AU ties and take on more imports to aid in that regard.
I can now understand why China goes through so many political crisis over the centuries. Many think the West is dysfunctional??? Aint got nothing on China. You watch that county implode shortly. CCP must think or they are the Triad.
the US will face a similar set of difficult decisions at some point bow to the CCP and keep enjoying any economic benefits from that relationship but pay for that shortsightedness with an erosion of independence or resist the pressure, suffer economically and avoid CCP’s control
Canada was going to let the Chinese PLA do arctic warfare training in Canada until it became public and caused a shitstorm. The Trudeau government invited the Chinese People's Liberation Army for joint training at the Canadian Forces Base at Petawawa in the province of Ontario last year, months after China's arrests of two Canadians. Canadian military was against it but the Canadian diplomats were all for it. Needless to say, once all of this became public recently and with two years and counting of Chinese hostage diplomacy the public outcry was swift and clear.
Australian Iron Ore prices are skyrocketing, and a Deloitte consultant quoted in the article says that it will likely be a net gain for Australia: https://www.news.com.au/finance/eco...s/news-story/2adc757f96057f23ad3cdd0be4770325 This is hurting China in the sense that the prices they are paying for Canadian coking coal is higher than they were paying for Australian coking coal. And it has sharply driven up the prices China is paying for their iron ore imports.
Justin should cut a deal with Scott and have Aussie drop ship to China on behalf of Canada. Canada just make the difference without doing a thing. Justin still to still have to deal with Xi on prisoner swap if Biden choose not to take on Huawei. I thought prisoner swap was between iron curtain.
That's the price Australia paid involving in a trade war along with US. Now US tries to make aussies switching to green energy under the threat of sanctions.
I'll excuse your daft post as it's only your 2nd one, hence not gonna bother debating you. Chinese aren't so smart, price of coal now rising, shortages, inferior product they buy elsewhere, more polution, cost of industrial production will rise, cost of living for Chinese will rise. "Shoot me in the foot."
https://www.marketwatch.com/story/a...spat-with-china-01608093441?mod=mw_latestnews I hope WTO does something to set things straight for Australia.