Australian Economy

China increasingly expected to drop ban on Australian coal as nation’s economic woes deepen

Expectations that China’s leader Xi Jinping will reverse his unofficial ban on Australian coal imports are growing as the country’s economic problems continue to mount.

There is no official sign from China’s Ministry of Commerce that it will dump the ban, but analysts in China say the mounting cost of coal imported from other countries is hurting both steelmakers and the energy sector.

One Beijing-based analyst who declined to be named due to the political sensitivity of the issue said the high price of imported coking coal was causing huge pain for the country’s steel sector.

He said allowing Australian shipments to return would likely lower production costs, although the analyst was unaware of any plans to do so.

Bloomberg earlier reported that a proposal to resume Australian coal imports was being submitted to senior leaders in China, amid fears European restrictions on Russian exports would push up global prices even further.

China coal tariff will affect Australia's mines
China’s leadership is reportedly worried about a repeat of electricity shortages seen last year.(ABC News)

Australia exported close to $14 billion of coal to China in 2019 — most of that coking coal for steelmaking, but the thermal coal market for electricity generation is also extremely tight.

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