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China 'ban' on imports sends coal prices plummeting

Business

Metallurgical coal prices have plunged in the past week as China’s apparent ban on Australian imports rocks the industry.

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Although there is no confirmation yet, BHP has indicated that some of its shipments had been deferred by Chinese customers.

But it remains unclear if there is a ban in place or if it’s the common event of steel mills reaching the top the of their import quotas.

The China market is worth about $9 billion to Queensland.

RBC Capital Markets said the restrictions had sent Australian premium metallurgical coal down 10 per cent for the week and were now below $US130 a tonne ($A182). Thermal coal prices have fallen further and were down 16 per cent.

The company said China’s importers were now looking to defer or re-sell their cargoes. A significant spread has also emerged between the domestic price and the import price.

Domestic producers are receiving about $US180 a tonne compared with the import price of just below $US130.

India had provided some offset, according to RBC. It’s metallurgical coal imports were up 35 per cent in August.

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