SINGAPORE/ MELBOURNE: Chinese interest in Australian coal has been limited by the upcoming Lunar New Year holiday and high domestic inventories, meaning few deals have been completed since China lifted an unofficial ban on imports last week.
Thawing diplomatic relations between Australia and its biggest trading partner led to China allowing three power utilities and the country’s largest steelmaker to resume Australian coal purchases for the first time since 2020.
The resumption of the coal trade between Australia and its largest trading partner China after a three-year halt is being watched as a test case for the return of shipments of other Australian goods such as wine and barley which accounted for billions of dollars of trade between the two nations.
Last week, one of the utilities, China Energy Investment Corp, placed an order to buy Australian thermal coal for late January. However, ample stocks and weak demand in China have doused the appetite for fresh shipments with the other utilities yet to book cargoes, three industrial sources told Reuters.
An Australian mining executive said their company received enquires from Chinese coal buyers for cargoes of metallurgical and thermal coal in late November – around the time that the leaders of China and Australia met during the G20 conference – on the availability for cargoes for the first half of 2023, which he described as “tyre-kicking”.