China ‘ban’ on imports sends coal prices plummeting

Metallurgical coal prices have plunged in the past week as China’s apparent ban on Australian imports rocks the industry.

Oct 15, 2020, updated Oct 15, 2020
Prices for coal have plunged

Prices for coal have plunged

Although there is no confirmation yet, BHP has indicated that some of its shipments had been deferred by Chinese customers.

But it remains unclear if there is a ban in place or if it’s the common event of steel mills reaching the top the of their import quotas.

The China market is worth about $9 billion to Queensland.

RBC Capital Markets said the restrictions had sent Australian premium metallurgical coal down 10 per cent for the week and were now below $US130 a tonne ($A182). Thermal coal prices have fallen further and were down 16 per cent.

The company said China’s importers were now looking to defer or re-sell their cargoes. A significant spread has also emerged between the domestic price and the import price.

Domestic producers are receiving about $US180 a tonne compared with the import price of just below $US130.

India had provided some offset, according to RBC. It’s metallurgical coal imports were up 35 per cent in August.

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