https://www.smh.com.au/business/the...coal-in-new-trade-threat-20200521-p54v8w.html Chinese power stations told to avoid Australian coal in new trade threat Nick Toscano May 21, 2020 — 7.05pm Australian coal exporters are facing the risk of tougher restrictions selling into China as government authorities in Beijing direct state-owned power plants to purchase domestic product instead. The move threatens to add to escalating tensions between Australia and its largest trading partner and follows new customs reforms that analysts fear could lead China to delay cargoes of Australia's most lucrative export, iron ore. Australia is a major exporter of thermal coal to China.Credit:Nic Walker Analysts and industry insiders told The Age and The Sydney Morning Herald that the Chinese government has begun warning state-owned power utilities not to buy new cargoes of Australian thermal coal – Australia' second top commodity export – and to purchase domestic coal instead. News of the government directive on thermal coal - the kind of coal used to generate energy - has been circulating among traders following a meeting of China's National Development and Reform Commission. "Either in that meeting or after that meeting, apparently five major state-owned utilities are said to have been directed to stop buying new cargoes of Australian thermal coal," Wood Mackenzie's Asia-Pacific head of coal Rory Simington said. "The idea that the government has is that the utilities will switch to buying domestic coal to support the industry, but we think it's more likely that the utilities will look to buy additional Russian coal or Indonesian coal." An industry insider, who was not authorised to speak publicly on the matter, said Beijing was encouraging Russian imports over Australian imports. "The China-Australia situation is not good, and traders are getting the message very loud and clear from the government," he said. After banning beef from four Australian abattoirs and announcing an 80 per cent tariff on Australian barley, there have been suggestions in Chinese state media in the past week that the tensions between Canberra and Beijing could spill over into bigger exports such as iron ore, coal and liquefied natural gas. On Thursday, China released new rules coming into force on June 1 under which customs inspections for iron ore shipments would be conducted at the request of the buyer instead of the existing regime of mandatory inspections. Miners said they were positive about the changes saying they could speed up trade flows because fewer batches might ultimately get inspected. But the announcement is also being seen by some in the market as a "subtle message" to Australia, warning that customs could single out Australian cargoes if they wanted. Beijing is expected to tighten coal import controls in the second half of 2020 to support domestic thermal coal prices which have been on a downward trend due to the severe impact of coronavirus lockdowns and and reduced industrial activity. As China gears up to restart most activities, the domestic thermal coal price is not finding enough support amid a supply glut, said Deepak Kannan, of S&P Global Platts, falling below a target price range of between RMB 500-570 a tonne. "That may be one of the reasons why China is looking to focus more domestically than on imported coal," he said. Unofficial import quotas, restrictions and port delays have become common for Australian producers trading coal to China since February last year, with customs clearance times in some cases blowing out to more than 60 days. Federal Trade Minister Simon Birmingham and Resources Minister Keith Pitt said China now appeared to be continuing to place informal short-term quotas on coal imports in order to protect its domestic industry and jobs, issues that the industry has "successfully managed previously". But they said the government was monitoring the situation closely and expected any arrangements China puts in place to be consistent with World Trade Organisation (WTO) and compliant with the China Australia Free Trade Agreement. Mr Simington said Chinese restrictions targeting Australian coal were "never official, always verbal ... and it's actually very hard to determine what is happening at any particular point in time". He said Chinese-Australian trade had been resilient in the face of import restrictions, adding that he would "expect that to continue" even in the face of the latest directive on thermal coal. "While the government can be very political, the coal buyers aren't, and we are still seeing demand for Australian thermal coal in China," he said. "The Chinese market is larger than the five utilities concerned."
The entire World is highly pissed off at China at the moment. And China's heavy handed threats in response has only made matters much worse. India has sent troops to its border with China. China's deceit and lying about COVID has been a diplomatic disaster for China. Apparently China has taken a huge hit in terms of trust and confidence amongst the World community. This isn’t my opinion - there is a worldwide backlash of negative sentiment against China. China’s geographical neighbors, Europe, and the US are more far more skeptical of China and have an increased negative attitude about China. If you want to see some real hatred and vitriol, google what the Brazilian, Indian, and Italian politicians and press have to say about China. It's nasty. https://www.google.com/amp/s/www.ny...ld/europe/backlash-china-coronavirus.amp.html https://www.google.com/amp/s/www.washingtonpost.com/world/2020/04/14/its-not-just-trump-whos-angry-china/?outputType=amp https://www.google.com/amp/s/amp.th...e-china-over-covid-19-outbreak-as-row-deepens https://asia.nikkei.com/Spotlight/C...to-emerge-as-leader-of-post-coronavirus-world https://www.pewresearch.org/global/...reasingly-negative-amid-coronavirus-outbreak/ https://www.fpri.org/article/2020/04/chinas-covid-19-diplomacy-is-backfiring-in-europe/ https://www.google.com/amp/s/amp.theatlantic.com/amp/article/610273/ https://foreignpolicy.com/2020/04/29/china-southeast-asia-coronavirus-pandemic-india-pakistan/ https://www.google.com/amp/s/www.br...ak-affecting-chinas-relations-with-india/amp/
According to grand mother story, big fish eats small fish. But! To eat the big fish, you need just a tiny tiny creature like covid virus to eat the big fish. Who knows, WW3 might be based on how tiny you are, not how big and mighty and powerful you are.
https://www.smh.com.au/business/com...-china-restricts-imports-20200807-p55jlw.html Glencore to suspend Hunter Valley coal mines as China restricts imports August 7, 2020 — 4.02pm Swiss-based mining giant Glencore will suspend several coal mines across the Hunter Valley in New South Wales for at least two weeks as the coronavirus pandemic and Chinese government policies to avoid Australian coal cargoes hit demand for the commodity. Glencore on Friday said the site and equipment shutdowns, which would coincide with September school holidays, were necessary in order to wind back output volumes and manage the severe impact on demand. Workers would be required to take annual leave over this time, it said. Glencore is Australia's largest exporter of thermal coal to China.Credit:Nic Walker "Our focus is on taking the necessary steps to continue operations, manage the current market volatility and limit the impact on our workforce," the company said on Friday. "These measures will enable us to align our production levels with market demand, while providing the flexibility to ramp back up as economies recover." Export prices for thermal coal, one of the country's top export commodities, have been sliding as the coronavirus-driven industrial downturn weighs on global energy demand. But the situation for exporters to China including Glencore has been made tougher this year following an escalation of Chinese import restrictions. While unofficial limits are often imposed in China as away to support its domestic miners, a souring of diplomatic relations between Canberra and Beijing this year over calls for a coronavirus inquiry prompted the Chinese government to instruct state-owned utilities to avoid Australian coal in particular – favouring Indonesian or Russian cargoes instead. Revenue from Glencore's sales of Australian thermal coal - coal used to generate electricity - was 23 per cent lower in the past six months compared to the prior year due to lower demand and prices. Glencore told investors earlier this week it would reduce Australian coal production by 7 million tonnes, or 8 per cent, in response. Glencore is the biggest thermal coal producer in the NSW Hunter Valley. During the previous downturn in the coal market in 2015 Glencore cut coal production by 15 per cent. "The changes are consistent with measures we have put in place in the past in response to challenging market conditions," the company said on Friday.
https://asia.nikkei.com/Politics/In...coal-project-in-Pakistan-after-Australia-spat China reignites coal project in Pakistan after Australia spat China has shown renewed interest in Pakistan's significant coal reserves following a diplomatic spat with Australia, by far its largest supplier. © AP MIFRAH HAQ, Contributing writerAugust 19, 2020 17:29 JST KARACHI -- As tensions grow between China and Australia, the superpower's main coal supplier, work is being stepped up in Pakistan's largest coalfield on a project conceived to feed local power plants, but which some experts believe might provide Beijing with an option for an alternative source of coal. After months of delay due to the COVID-19 pandemic, some 500 employees of Shanghai Electric Power arrived in Pakistan earlier this month to work on the $1.9 billion Thar Block-I integrated coal mine and power project located in the country's southeastern desert region of Tharparkar. Wholly owned by China, the project is a key component in the $50 billion China-Pakistan Economic Corridor (CPEC), itself a significant part of Chinese President Xi Jinping's flagship Belt and Road Initiative. The project revolves around an open-pit mine capable of supplying 6.8 million tons of lignite annually to two onsite 660 megawatt power plants. In 2011, the Thar Block-I coalfield was leased for 30 years to a Chinese company, Sino-Sindh Resources, that is now a subsidiary of Shanghai Electric. The electricity generated will feed Pakistan's national grid, with the first power plant due to come online by August 2022, and the second the following February. Heavy machinery operating in an open-pit coal mine in Pakistan's Tharparkar region. © Reuters The Thar coalfield covers more than 9,000 sq. km of desert in Sindh province close to the border with India. It is Pakistan's largest coal reserve with an estimated 175 billion tons, and is the world's seventh largest lignite field. Pakistan's long-term plan is to develop the entire Thar coalfield in 12 blocks. Work on four of these is already underway with Chinese involvement. Pakistan urgently needs to develop indigenous energy sources to overcome a crippling 3,000 MW domestic power shortage at peak times and dependence on fuel imports. China is offering hydro, coal, solar and wind solutions through CPEC. "The development of energy plants is crucial for Pakistan as it wishes to industrialize and also to meet increasing demand due to its rapidly growing population," Zahid Ahmed, research fellow at Australia-based Deakin University's Institute for Citizenship and Globalization, told the Nikkei Asian Review. The acceleration of work on the Thar Block-I project comes at a time when China's thermal coal imports from Australia are being curtailed by Beijing. A diplomatic spat escalated into a trade war earlier this year after Prime Minister Scott Morrison called for an independent investigation into the COVID-19 pandemic. China, the world's largest coal consumer, is struggling to wean itself off imported coal. Beijing's main state planning body, the National Development and Reform Commission, has reportedly instructed state-owned utility companies not to buyAustralian thermal coal. Some wonder if China is in the market for a new coal supplier, but Imtiaz Shaikh, the energy minister of Sindh province, told Nikkei that Shanghai Electric has not expressed any intent to import Pakistani coal. He said the cost of the Thar Block-I project could be as high as $2.5 billion. "We are not currently operating at a size and scale to emerge as a player in international markets," Syed Abul Fazal Rizvi, chief executive of Sindh Engro Coal Mining, a private Pakistani company operating in Thar Block-II, told Nikkei. "Our immediate focus is to indigenize Pakistan's own energy mix so that we can reduce our country's dependence on foreign fuels." Some experts believe, however, that China can fall back on its investments in Pakistani coal to help meet domestic energy needs in the event of soured relations with existing trade partners or geopolitical tensions in the South China Sea. Loading coal at Gladstone in Queensland, Australia. © Reuters Michael Kugelman, deputy director of the Asia program at the Wilson Center, a Washington think tank, said that it is natural for China to double down on its safest and strongest relationships to pursue its economic and energy interests when there are diplomatic tensions with a number of countries. "Pakistan is arguably China's closest ally, and so it's a natural partner to look to -- especially given the long track record of Chinese energy infrastructure projects [in Pakistan]," Kugelman told Nikkei. "Geography and geopolitics give China strong confidence about Pakistan as a supply route for coal imports. It's a bordering state, and it's a state with a deep alliance with China." Ahmed of Deakin University said that a full suspension of Australian coal exports to China is unlikely, but that does not preclude exploring alternative sources in Pakistan. Monique Taylor, lecturer in world politics at the University of Helsinki, noted that the strategic value of Thar coal is seriously limited by its low quality. She said the Pakistani lignite has no export value because "the cost of shipping per unit of heating value makes it uneconomic." "Its value is for use in power generation locally or close to the mine site," she said. "Thar coal is not a replacement for the high-grade coal that Australia exports."
China has allegedly told steelmakers and coal-fired power plants to stop importing Australian coal immediately with ports instructed not to unload cargoes. In the first six months of 2020, Australia was the largest supplier to China of coking (or metallurgical) coal — but it looks like those days are over. Although the news headlines out of Asia overnight focused on the coal needed for steelmaking, it seems the Chinese move will also affect our thermal coal exporters. China has told some of its state-owned steelmakers and coal-fired power plants to stop importing Australian coal with immediate effect. Among the utilities given instructions to look elsewhere for thermal coal are Huaneng Power International, Datang International Power Generation and Zhejiang Electric Power. Reports out of Hong Kong this morning said some 7 million tonnes of Australian coking coal is sitting on bulk carriers now waiting on China’s coast. “There are several vessels carrying Australian coal waiting at Chinese ports for more than a month now,” S&P Global Platts analyst Deepak Kannan told the South China Morning Post. Other reports state the ports have been instructed not to unload Australian coal cargoes. London-based commodity news service Argus Media reports that US miners and traders have noted more enquiries for American coking coal. Argus said 4Mt of coking coal in 61 vessels are waiting to be allowed to unload at just two northern Chinese ports, Jingtang and Caofeidian. This is politics — but not entirely Some sources suggest other factors may have played into China finding another way of punishing Australia for standing up to Beijing on a number of issues, including demanding an enquiry into the origin of the COVID-19 pandemic, access to the South China Sea, the independence of Taiwan and cracking down on Beijing-linked operations within Australia. China is making efforts to reduce pollution and, more importantly, is reportedly pushing the coal mining industry to consolidate and enlarge so that it can reduce its reliance on imports. And coking coal is a more suitable weapon in the hands of Beijing: China still remains heavily reliant on Australia for iron ore but has far more options when it comes to sources of coking coal. It must be noted that Beijing has not, as far as we can tell, issued similar instructions to cease buying coking coal from any other country. Reports out of Hong Kong state the ban on Australian coal is likely to remain “indefinitely”. Chinese mills will now shun Australian coal It is unlikely that any written directives have been made as this would allow Australia to take the issue to the World Trade Organisation. Argus said a “major” northeast China state-owned steel mill was given verbal instructions over the weekend, and others are being told over the following days. A Shanghai trader pointed out that, while some mills have yet to receive instructions, the word has got around and all steelmakers are now likely to shun Australian coal “whether or not the ban is real”. On Monday, just before the news broke across the mainstream media, Commonwealth Bank commodity analyst Vivek Dhar sent out a note predicting Australia’s coal exports to China would keep dropping for the remainder of 2020. He noted this is not the first time China has used coal as a weapon against Australia: on 18 May five state-owned power companies were instructed by the National and Development Reform Commission not to buy Australian thermal coal. While Mr Dhar agrees the move is political, he said it is also reflective of domestic Chinese policies. “China’s overall coal import restrictions have been a persistent theme this year, as well as through the back half of 2019, as authorities look to boost self-sufficiency and provide support for China’s coal sector,” he said. Prices to fall — but spike with La Nina Chinese policy makers are reportedly targeting total coal imports — both coking and thermal — of 270Mt in 2020, down around 10% from 300Mt in 2019. Mr Dhar noted that in August, China accounted for 23% of Australia’s thermal coal exports and 28% of coking coal shipments. Both types of coal now face downside risks. In another note on Tuesday, Mr Dhar said coking coal exports are also at risk from La Nina, with expected flooding and cyclones in Queensland. But this will at least result in higher prices. “With about half the world’s coking coal exports concentrated in the Bowen Basin, any extended disruption to coal and rail infrastructure in the region will likely result in coking prices spiking,” Mr Dhar said. https://smallcaps.com.au/china-reportedly-cuts-australian-coking-coal-imports/