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China Could End Australia Coal Ban As Early As Late Summer, Reports Say

China Could End Australia Coal Ban As Early As Late Summer, Reports Say

Rumors swirl as China could reverse its unofficial ban on imports of Australian coal due to mounting supply uncertainty over the future loss of Russian energy supplies when Western-led sanctions are enacted.

Reuters cited a Chinese news website: “Rumors of easing the ban on Australian coal imports have been circulating recently.” 

Last week, China’s foreign minister, Wang Yi, held talks with Australian counterpart Penny Wong during an economic summit of G20 foreign ministers in Bali. 

“There were rumors last week saying the ban was to be lifted, and now the talk is intensifying after the two parties met,” the website added.

Bloomberg adds more color by citing people familiar with a proposal sent to Chinese leadership urging them to lift the nearly two-year ban on Australian coal. 

The proposal will be submitted to senior leaders, with a recommendation Beijing should resume Australian imports, according to people familiar with the plan. That’s been prompted by fears European-led curbs on Russian energy will increase competition for coal from China’s main suppliers such as Indonesia. 

Officials are looking to boost fuel supplies to avoid a repeat of last year’s power disruptions — particularly ahead of a key party congress — said the people, who requested anonymity to discuss a private matter.

The plan will be handed to leaders who are in a position to authorize any change in policy to make a final decision, the people said. Though it remains uncertain whether a decision will ultimately be made to lift the ban, some companies are already preparing to resume imports, according to two other people. –Bloomberg 

Chinese Foreign Ministry spokesman Wang Wenbin told reporters at a regular press conference on Thursday that Australia has the ability to “build up positive energy, and create favorable conditions for sound and steady development between China-Australia trade relations.”

Beijing shunned coal imports from Australia in late 2020 over Canberra’s banning of Huawei Technologies Co. equipment in 5G networks. The situation worsened when former PM Scott Morrison requested an independent probe into the origins of the COVID-19 — deeply angering Beijing. 

China’s potential reversal on the coal ban comes as the European Union and G7 countries will restrict Russian coal imports later this year. This will allow China more breathing room to procure metallurgical coal for steelmaking and power plants. 

Today’s rumors led to a surge in Australian coal stocks:

Firms such as Coronado Resources CRN.AX, Yancoal Australia YAL.AX, Whitehaven Coal WHC.AX and New Hope Corp NHC.AX all saw shares rise between 6% and 10% on the report. -Reuters 

China could reverse the unofficial coal ban as soon as “August or September,” according to an Australian news outlet.  

Tyler Durden
Thu, 07/14/2022 – 20:00

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