Coal exporters forced to divert ships as China port delays intensify

Questions are also being asked in Australia about reports that customs officials at the port of Fangcheng in southern China are conducting “radioactive tests” of Australian coal. The claim emerged in a report from S&P Global Platts earlier this month.

But industry sources said they had never before heard of Australian coal being subjected to “radioactive tests”.

The latest news about extra testing of Australian coal at the Fangcheng port follows news last month that the port of Dalian, in north east China, had imposed limitations on Australian coal imports.

Observers say the tougher approach by China to Australian coal exports means that Chinese energy companies are paying more for coal from Chinese producers instead of Australian, high quality energy coal.

What is quite clear to us is there is a political element to this.

Industry source.

“What it’s doing is it’s creating uncertainty and forcing a discounting of the shipments that are diverted elsewhere,” one source said.

“What is quite clear to us is there is a political element to this,” the source said.

Trade minister Simon Birmingham said the government was continuing to engage closely with the Australian coal industry on the access in China.

“We have received assurances from China’s Ambassador to Australia and the Ministry of Foreign Affairs in Beijing that delays are non-discriminatory and are not targeted to Australian coal,” he said.

The continued uncertainty in China was seen as a key factor behind a sharp fall in the stock price of Australian-listed coal miner New Hope. Its shares fell 11.8 per cent to close at $3.89, wiping more than $432 million off its market capitalisation.

We have tonnages still going to China, it’s still performing well.

New Hope non-executive director Tim Millner

But New Hope non-executive director Tom Millner was unconcerned with China extending its restrictions on Australian coal. “We have tonnages still going to China, it’s still performing well,” he said.

“We’re not worried about China, especially with their continued power station demand [for thermal coal].”

Other Australian coal producers did not feel the same effects as New Hope, with shares in Whitehaven Coal down 3.7 per cent to $4.14, while Yancoal shares were up 1¢ to $3.82.

A spokesman for coal producer Yancoal Australia said it did “not have a significant exposure” to the current import restrictions affecting the Chinese market.

“However, we are monitoring the impacts of the ongoing restrictions on China coal prices compared against alternative markets such as Vietnam and India,” he said.

“We maintain the flexibility required to adjust our sales based on best price, not port access. This specifically means that unlike some competitors, we are not being left with ships offshore or product coal looking for a home,” he said.

Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.

Covering energy and policy at Fairfax Media.

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