Before the restrictions were imposed in late 2020, China bought more than 30 million tonnes of coking coal annually from Australia, about 40% of its imports. "We won't see Australian coal starting to flow until we see that arbitrage window open again," said Lloyd Hain, managing director of mining research firm AME Group in Sydney.
"The only way China prices are going up is if we see a surge in steel production, and that doesn't look like it's going to happen in the next month or so." Premium Australian hard coking coal (HCC) was priced at around $360 a tonne on a free-on-board (FOB) basis last Friday, equivalent to about 2,650 yuan ($385) a tonne delivered to north China after adding freight and other fees, traders said.
Importers would face losses of about $65 per tonne, as
similar quality domestic supply is trading at about 2,200 yuan a
tonne, according to Reuters' calculation based on market prices.
Mongolian and Russian coking coal priced at about 2,030 yuan
a tonne at China-Mongolian border and 2,240 yuan a tonne at
northern Chinese ports, respectively, are also more competitive
than Australian supplies, the traders said.
Analysts and traders expected limited impact from the
resumption of Australian coal imports in China as Australia's
market share has largely been taken over by Mongolia and Russia
in the past two years.
In 2022, China's imports of Russian coking coal doubled from
2021 and arrivals from Mongolia surged 82% year-on-year, Chinese
customs data showed.
Only one Australian coking coal cargo, bought by China Baowu
Group, has reached China since the import restrictions were
lifted in January, according to traders and shiptracking data
from Refinitiv and Kpler.
About three shipments are scheduled to arrive this month
versus more than 30 Australian thermal coal cargoes, the data
showed.
Australian coking coal cargoes en-route to China could be
resold if Chinese domestic prices fall further, traders said.
($1 = 6.8766 Chinese yuan renminbi)
(Reporting by Muyu Xu; Additional reporting by Melanie Burton
in Melbourne; Editing by Florence Tan and Sonali Paul)
