Aussie coal clears China ports in sign of trade freeze thawing

Experts believe a two-year trade freeze starting to thaw after three shipments of Australian thermal coal cleared a Chinese port in recent days.

At least three shipments of Australian thermal coal have cleared a Chinese port in recent days, in an early positive sign of the two-year trade freeze starting to thaw, according to a commodity market expert.

But there has yet to be confirmation on whether the coking coal from Queensland’s Moranbah North mine has made it through.

Thermal coal trade is also expected to remain limited to a handful of Chinese utilities for the time being.

Coal at the Port of Brisbane. Picture: AAP image, John Gass

The development has been welcomed by Trade Minister Don Farrell, who recently held a virtual meeting with his Chinese counterpart, saying he wanted to continue to stabilise the rocky relationship.

It is the first significant new coal trade between the two countries since Beijing implemented an unofficial ban on Australian coal in November 2020, amid a series of other sanctions against products including wine, barley and seafood.

Queensland’s coal trade with China was worth about $10 billion a year, prior to the freeze.

Up to four Chinese state-owned utilities, China Baowu Steel Group, China Datang, China Huaneng Group, and China Energy Investment, have reportedly been given the green light to import a limited amount of Australian coal.

Argus Media’s Singapore-based coal market analyst Skylar Yong said the first shipment arrived at a port of Guangdong over February 5-7 and more had successfully docked since.

“At least three cargoes were successfully discharged, which were all purchased by the utilities under the approved list of Australian coal importers,” she said.

“There wasn’t any custom clearance issue for the listed utilities.

“We heard a utility not under the approved list of Australian coal importers, resold its Australian thermal coal to Vietnam at a loss due to the potential risk of custom clearance.”

She said thermal trade follows were likely to be restricted to the approved utilities until clearer instructions were given to the rest of the market players.

Trade Minister Don Farrell. Picture: NCA NewsWire / POOL / Lukas Coch

Trade Minister Don Farrell said any step toward resolving the trade impediment was welcome.

“I’m aware a shipment of coal arrived at a Chinese port last week and to the best of my knowledge, there were no difficulties offloading that coal. So that’s positive news,” Mr Farrell said.

“All the news in this area is positive.

“We’ve just got to make sure that we continue to stabilise the relationship, and build on the discussions that the Prime Minister has had with President Xi, the discussions that Foreign Minister Wong has had with her equivalent, and now the discussions that I’ve had with my counterpart.”