China needs more coal but it’s not likely to turn to Australia for supply

[superadmin]

China needs more coal to avert a power crisis — but it’s not likely to turn to Australia for supply

• China is facing its worst power crisis in years due to a coal shortage.
  
• Australia has the coal Beijing needs, but the world’s second-largest economy is unlikely to reverse an unofficial ban on Australian coal imports anytime soon, analysts told CNBC.
  
• China stopped buying coal from Australia late last year, after Canberra backed a call for an international inquiry on how Beijing handled the Covid-19 outbreak.
  

China is facing its worst power crisis in years due to a coal shortage. While Australia has the coal Beijing needs, the world’s second-largest economy is unlikely to reverse an unofficial ban on Australian coal imports anytime soon, analysts told CNBC.

That’s despite recent media reports suggesting that China is releasing small quantities of Australian coal that was stuck at Chinese ports for months due to the ban.

“Reports that small quantities of Australian coal were allowed to clear customs in China have increased speculation that Chinese authorities will look to relax the import ban on Australian coal,” Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank of Australia, told CNBC.

“We don’t think Chinese authorities will relax China’s ban on Australian coal this winter,” he said.

Late last year, China stopped buying Australian coal. That happened as trade tensions between the two countries soared after Canberra backed a call for an international inquiry into Beijing’s handling of the Covid-19 outbreak.

Before that, Australia was a major coal supplier to China — in 2019, some 38% of Chinese thermal coal imports came from Australia.

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