Birmingham told National Radio Australia that if this was true, the reports “point to discriminatory business practices published by the Chinese authorities.” China has already banned or imposed tariffs on a host of other Australian exports.
In response to a question from journalists on Tuesday about the reports, the Chinese Foreign Ministry directed questions to “relevant authorities.” But spokesman Wang Wenbin admitted that “the Chinese authorities have recently taken relevant measures against some Australian products exported to China in accordance with the law and regulations.”
Relationships have been deteriorating since April, when Morrison called for an international investigation into the origin of the coronavirus pandemic. Beijing described the move at the time as “political manipulation.”
In the months that followed, China imposed exorbitant tariffs on Australian winemakers, banning or taxing exports of other products, including beef and barley.
“This blackout makes it difficult to quantify the amount of escalation this news represents,” said Sean Lang Cake, chief economist at Oxford Economics, referring to the current turmoil in the thermal coal trade. “It is clear that these matters have not been resolved, and it is difficult not to see this news as a further deterioration.”
Investors in Australia’s major coal producers view these reports as a bad sign. Coronado Global and Yancoal Australia shares were down more than 8% in Sydney on Tuesday. The Whitehaven Coal is down nearly 6% on Tuesday, down 10% so far this week.
Analysts at ANZ Research wrote in a research note that Chinese reports confirm “what has been assumed since reports emerged of import restrictions on coal from Australia in October”. They noted that although China was an important market for Australian thermal coal – it accounted for nearly a third of Australia’s total exports in 2018 – its market share has been declining since then.
“Australian exporters found additional buyers in South Korea, Vietnam and Japan,” the analysts wrote. “As such, we see Australia’s thermal coal exports hold up relatively well, despite the Chinese ban.”
Angus Watson contributed to this report.
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