China is ready to receive coal imports from Australia, with several shipments having arrived or been routed to the nation. It is a strong indication that the two countries are gradually resuming coal trades after more than two years of stalemate. According to Kpler’s cargo-tracking data, a total of five coal cargoes were delivered, scheduled or are in transit from Australia to China in January and February.
A 134,760 t cargo of thermal coal carried by a capesize vessel left Australia’s Hedland port on January 3 and arrived at Kemen port of China’s Fujian province on January 16, sold by Roy Hill. Two other cargoes are also on their way to China. One is a 72,229 t metallurgical cargo by a Panamax vessel, which departed from Hay Point on January 23 and is set to arrive at China’s Zhanjiang port on February 10. The cargo was sold by BMA and bought by Baosteel, the arm of China’s top steelmaker Baowu Group.
Baowu is one of the four government-backed firms that were given permission from China’s state planner in early January to purchase Australian coal. The company has 12.25 million tonnes (mnt) of annual steelmaking capacity at its Zhanjiang base. Another Handysize vessel, carrying 12,329 t of thermal coal, is set to arrive in China’s Changshu on February 12, after completing the loading on January 24 at Newcastle port.
It is worth noting that the buyer is China Resources Power, a state-owned power producer but does not belong to the four state companies that Beijing initially designated to resume coal imports from Australia. Unless further information is provided by the government, this signifies that more state companies are permitted to buy Australian coal.
In addition, two other Australian cargoes are scheduled to enter China in February, both are metallurgical coal. One is scheduled to start loading on February 13 at Hay Point and arrive in China on February 22, and the other will be loaded at Abbot Point on February 6 and arrive in China’s Shandong province on February 15.
Market sources earlier told Sxcoal that a number of Chinese traders were working on coal imports from Australia. Considering there were not many cargoes available for February delivery, the impact was not obvious in the Chinese market. But as more cargoes are booked for March delivery, the whole market pattern could be reshaped and prices could take a hit for both Chinese domestic coal as well as Indonesian coal, which contributes to the bulk of China’s coal imports.
Australia used to be China’s top coking coal supplier with roughly 2-3 million tonnes of shipments a month. It was also a key thermal coal supplier with volume only after Indonesia. In 2019, the year before China’s unofficial ban was introduced, the nation imported 76.96 mnt of coal from Australia, Chinese Customs data showed.
Note: This article has been exchanged under the article exchange agreement between CoalMint and SX Coal.
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