Chinese traders freeze Australian coal orders amid 40-day customs delays: sources
Chinese coal traders have stopped ordering Australian coal as clearing times through China’s customs have doubled to at least 40 days, according to major buyers in China and international coal merchants, resulting in a sharp fall in Australian prices, Trend reports referring to Reuters.
The traders and a broker said only cargoes from Australia, the biggest supplier of the fuel to the world’s top consumer, were affected.
“We have stopped ordering coal from Australia because it is unknown how long the restriction will last,” said a manager at a Shanghai-based trading company who usually buys around 400,000 tonnes of Australian coal every month.
Customs clearance typically takes five to 20 days. Now it can be as much as 45 days, said the manager, asking not to be identified as he was not authorized to speak to the media.
The world’s biggest coking coal exporter, BHP Group, played down any suggestion the customs delays had any connection to recent Beijing-Canberra diplomatic tensions.
“I don’t believe for one moment this is linked to some of the higher level issues of relationships between China and the rest of the world,” BHP Chief Executive Andrew Mackenzie said, speaking during a post-earnings conference call.
He said the delays were not targeted against Australia, and reflected China’s effort to balance domestic production versus imports.
International traders confirmed the delays.
“Yes, the Chinese ports are holding up all thermal shipments ex Australia for 40-60 days...My clients are only buying spot Indonesian coal,” said an Australian coal trader, who asked not to be named due to company policy.
A coal broker at China’s state-backed mining group Minmetals said he had asked clients to put Australian imports on hold.
The delays have been a large contributor to slump in Australian coal prices.
Spot cargo prices for thermal coal exports from Australia’s Newcastle terminal have fallen by more than a quarter from their 2018 peaks, to below $90 per barrel amid ample supply and tepid demand, especially from China.
It was not clear why China had stepped up checks on Australian imports, but tension between Beijing and Canberra has grown in recent months over issues of cyber security and China’s influence in Pacific island nations.
China’s General Administration of Customs did not respond to a request for comment. There was no immediate response from the Foreign Ministry to a faxed request for comment.
Authorities at some ports notified importers verbally this month that Australian thermal coal, but also coking coal would take longer than usual to clear, the Shanghai-based manager said.
A Beijing-based coal trader and a purchasing manager at a coke plant received similar notifications. None of the buyers were aware of the reason.