It’s high quality and the price is a bargain, but the risk may be too great for Chinese buyers looking for a quick profit.
Newcastle thermal coal prices have lost almost $US20 a tonne, or almost 19 per cent, since early March, making supplies from Australia cheaper than Chinese domestic grades for the first time since April 2018.
But there’s a catch. Coal from Australia, which is the world’s second-biggest exporter, has been subject to delays since January, and cargoes are sitting at China’s ports for extended periods as officials slow customs clearance.
“Cheaper Australian coal relative to domestic prices would typically induce Chinese buyers to import more,” said Dang Man, an analyst at brokerage Maike Futures. “But with the import restrictions in place, it’s hard to see anyone willing to take the risk.”