Australia rejects ‘conspiracy theories’ as China coal delays double – The Australian Financial Review

“There remains some issues around the timeliness of processing through ports and we’re eager to understand any reasons for those delays.

“There are quite likely, from what we understand, domestic factors at play in terms of those environmental factors they cite as well as certain domestic industry factors.”

Traders and analysts in China maintain Australian coal, which is cleaner and cheaper than China’s domestic coal, had been singled out. While many believe the restrictions on imports are designed to boost the domestic coal price, traders said even the perception that Beijing wanted to punish Australia would hurt the industry.

“There will be a psychological impact for these consumers who will be more cautious in using Australian coal in the future,” one analyst at a major trading house said on Sunday. He said Indonesian coal was also taking longer to clear customs but Australian coal appeared to facing tougher quality checks than other countries. .

Another coal trader based in China said the speculation about a ban at Dalian would have a long-term impact from Chinese steel mills and power generators for Australian coal. “China’s coal users will be more cautious using Australian coal because of these political factors. We don’t know how long these policies will last,” he said.

The main northern Chinese port where the delays have occurred accounts for about 8 per cent of Australian coal shipped to China and less than 2 per cent of Australia’s total $60 billion in coal exports to overseas markets.

The slowdown in coal processing comes as China’s economy slows and amid speculation its central government and local governments may be trying to protect industry and jobs.

There has been speculation that China delayed accepting coal as payback for billionaire political donor Huang Xiangmo being rejected for Australian citizenship, criticism of China for cyber hacking and intellectual property theft, and banning Huawei from the 5G wireless network. However, the coal restrictions were first introduced at the end of January, before news of Huang’s rejection become public.

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Australian coal exports experienced a similar processing delay late last year, Mr Birmingham said, but ultimately posted record volumes and value for 2018.

Mr Birmingham said while Canberra and Beijing “don’t always agree on everything”, some commentators and analysts “love to jump to conclusions that are based on conspiracy theories”.

“But the facts demonstrate those conclusions are frequently invalid and incorrect,” he said.

For Australian investors, last week’s reports of a coal ban were a reminder of Australia’s economic dependence on its fragile political relationship with China.

“While the knee-jerk reaction from markets is understandable, a closer look at the numbers suggests some caution, at least for now,” RBC Capital Markets chief economist Su-Lin Ong said.

“We are mindful that the relationship between Australia and China has deteriorated in recent years and is more fragile at present than we would like to see from an economic perspective. Whether the Dalian developments reflect this remains to be seen.”

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