[ad_1]
The number of Chinese ports limiting or delaying imports of Australian coal has continued to rise, threatening to end the windfall of exports that swell federal coffers and heralding a possible long-term painful structural change in the economy. 39; economy.
In a worrisome state for Australia's trade balance and federal budget, traders and buyers in China reported Thursday that delays in Australian shipments started in February had spread from Dalian Port to north of Fuzhou, Fujian Province, south Rizhao to Qingdao.
According to a market source, the Platts news agency said that Australian thermal coal used for energy production had been "largely forgotten" by Chinese buyers, who favored Indonesian imports of Indonesian and Russian delay.
Reports have seen a sharp drop in the share price of Australian miners "pure play". Shares of New Hope Corporation lost more than 20% this week after announcing a sharp drop in exports to China, while Yancoal fell 9%.
But the impact will not be limited to the coal sector. The product is Australia's second largest source of export revenue and Chinese demand accounts for 3.7% of Australia's GDP, although half of that comes from coking coal exports used for the production of coal. steel.
The reference price for high-energy Australian thermal coal has seen several years of price increases above $ 100 per tonne. That figure has now fallen below $ 90 a tonne for the first time in almost two years, threatening some of the export rights boon Josh Frydenberg could put forward in his budget next month. A sharp fall could also hurt the US dollar.
It is not known why Australian imports were targeted for delays at customs. Official explanations from China mentioned the need for environmental controls and even a suggestion that imports should be controlled for radioactivity.
However, few people doubt that there is a considerable political dimension. The tension between Canberra and Beijing has increased in recent years against Chinese military ambitions in the South China Sea, but it has intensified within the reach of technology companies such as Huawei and ZTE, cyber-attack 'State' against Parliament rejection of Huang Xiangmo's visa.
However, China may want to reduce its reliance on foreign resources for intriguing, market-related reasons, and suggesting that the Australian coal industry could face a more existential threat.
Alex Turnbull of Singapore-based hedge fund Keshik Capital said the slowdown in the port was the result of profound changes in the Chinese economy. The huge expansion of rail infrastructure over the last decade has allowed China to start exploiting its vast coal basins in areas such as Inner Mongolia and Shanxi in a way that was not possible before , he added.
The imports of thermal coal were unheard of before 2008, he said, but they exploded to fuel the mbadive economic stimulus ordered by Beijing following the global financial crisis. At the same time, the country's national development commission has begun to add millions of tons of freight capacity to the Chinese railway system, in order to bring cheaper domestic coal to the coastal centers of heavy industries and the population. .
"What is happening now is that infrastructure projects have caught up with demand and as a result, imports will dry up," said Turnbull. "We were waiting for the moment when China would turn off the demand for Australian coal imports, and that seems to be the time."
He conceded that there was a "political element" in what was happening but pointed to the seismic shift that was occurring beneath the surface. "Focusing solely on these policy issues risks missing out on the broader global vision that the thermal coal market will contract. Total Australian thermal coal imports into China will drop, "he said, adding that China also wanted to increase its current account surplus by reducing imports and supporting its currency.
Other badysts see a less decisive change and say that the slowing down of the ports is a brutal and deliberate move by China aimed at bringing a correction of coal prices, which remain above what the Chinese government s & # 39; 39, waiting to pay.
"Basically, this is happening because the Chinese government wants to protect its own coal industry," said Rory Simington, senior badyst at Wood Mackenzie Energy Consulting firm, around the world. "The government wants prices to be high enough for its own producers. But he wants to limit imports so that profits benefit domestic producers and not Australia and elsewhere. "
The slowdown in imports of the Australian coal type is not new, he said, but the new element was that Australian coal was specifically targeted. The proof was that while Australian coal prices had fallen as a result of restrictions, the price of Indonesian coal had increased.
"People buying Australian coal have changed suppliers," he said. "If you have a ship sitting outside a port for three months while waiting for an authorization, you will buy Indonesian or Russian coal that will not be delayed."
Although Simington does not believe that Australian coal exporters face a deadly threat, producers will have to divert their coal to other markets if Chinese demand dries up. Alternative buyers are mainly India, Europe and other Southeast Asian countries. But prices will be lower, he said. A drop of $ 5 per tonne in the cost of low-grade or high-ash coal, which accounts for the vast majority of exports to China, could cost Australia $ 200 million a year, she said. -he declares.
Andrew O'Neil, professor of political science at Griffith University, said the situation was hard to read and left many badysts puzzled about China's motivation.
But he argued that Beijing's diplomacy could be more nuanced than many badumed and that the leaders used to use subtle signals to manage their relations with other countries. The ban on the import of coal could therefore be considered as "very carefully calibrated.
"It will not torpedo the Australian coal industry, but China could torpedo the Australian coal industry if it wanted to … so they are trying to send a signal," he said. "If I had to put money on it, I would say that this decision had a political and strategic dimension."
Source link
