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China to allow Australian coal cargo ashore despite ban

3rd December 2020

By: Reuters

  

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China is set to allow a shipment of Australian coal into the country, according to a person familiar with the matter, despite a ban on such imports remaining in place as tensions between Beijing and Canberra escalate.

A cargo of 135 000 tons of Australian thermal coal on the vessel Alpha Era, which has been waiting almost six months to unload at the southern Chinese port of Fangchenggang, is expected to clear customs and is bound for a local user, said the person, who asked not to be identified because the information is private.

Two other ships, the Dong-A Eos and the Dong-A Astrea, recently completed unloading Australian coal at the port of Jingtang, while a third vessel, the Dong-A Oknos, is in the process, according to data intelligence firm Kpler. It’s not clear if those cargoes will also be cleared by customs, and it remains uncertain whether the unloadings are exceptions to meet specific demand, or a sign of a broader unfreezing of Australian coal imports into China.

The vessels were part of a flotilla of more than 50 ships that have been waiting at least a month to offload coal from Australia, according to separate analyses of shipping data conducted by Bloomberg and Kpler last month. The discharges come as Chinese thermal coal futures soared to the highest close on record as safety checks at domestic mines limit supply.

“The speed of domestic coal price increases in China will to some extent decide how soon we could expect more Australia coal shipments to be discharged,” said Monica Zhu, a dry bulk analyst with Kpler.

Chinese coking coal prices have also soared to a four-year high after a new Covid-19 outbreak slowed border crossings from Mongolia, impacting trucks carrying the material.

Spokespeople for the Tangshan Port Group, which operates the Jingtang terminal, and the Beibu Gulf Port Group, which operates the Fangchenggang facility, declined to comment. China customs didn’t immediately respond to a fax seeking comment.

China has blacklisted a wide swathe of Australian commodities and foodstuffs, ratcheting up tensions between the two trading partners that have deteriorated since Huawei Technologies Co. was barred from building Australia’s 5G network in 2018. Chinese power stations and steel mills were told to stop using Australian coal and ports were instructed not to offload the fuel, Bloomberg News reported in October.

“China-Australia trade tensions may peak soon we believe, as they have raised prices for key global commodities to Chinese consumers,” Bloomberg Intelligence senior analyst Daniel Kang said in a Thursday note

Edited by Reuters

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