Title : Chinese officials ban Australian coal imports
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Chinese officials ban Australian coal imports
Australian coal producers have suffered another savage hit, with Chinese authorities placing an indefinite ban on imports ahead of a strict new regime of quotas.
Key points:
- The ban follows a marked slowdown in processing Australian coking coal imports this year
- Exporters are now experiencing similar delays for both coking and thermal coal through other big Chinese ports
- Coal is now Australia's most valuable export and China is its biggest market
The Reuters news agency reported customs officers based at the key northern port of Dalian stopped Australian coal imports and would move to cap imports for through their harbours at 12 million tonnes a year.
The move appears political, with only Australian coal being targeted.
Reuters said imports from Russia and Indonesia would not be affected.
News of the ban sent the Australian dollar tumbling in late afternoon trade.
At 6:00pm (AEST) the dollar had tumbled below 71 US cents, having moved above 72 US cents after stronger-than-expected jobs data earlier in the day.
The Dalian custom officers oversee imports through five harbours — Dalian, Bayuquan, Panjin, Dandong and Beiliang — into the heavily industrialised steel-making heart of China's north.
Fears of targeted action confirmed: analyst
Currently, the ban is centred on coking coal used in steel making, but the fear is it will spread to other ports and to thermal coal used in power generation.
Ahead of the ban, Australian exporters had experienced significant delays in moving coal through the Dalian ports, with the average time to process a load slipping from 25 days to 40 days since the start of the year.
Industry sources say similar delays are now occurring at other Chinese ports handling both coking and thermal coal.
Coal is now Australia's most valuable export generating $62 billion worth of income, with China consuming around a quarter of the total shipments.
CBA commodities analyst Vivek Dhar said the ban as it stands affects only a small percentage of Australia's coal exports, but the fear is the action will spread quickly.
"It has crystallised the fear that something is going on, that China is targeting Australian coal," Mr Dhar said.
Trade minister seeks urgent clarification
Trade Minister Simon Birmingham said he was asking Australia's amabassador in Beijing to seek clarification about the Reuters report.
He said he would work with the coal industry on matters of market access.
"China is a valued partner of Australia and we trust that our free trade agreement commitments to each other will continue to be honoured," he said in a statement.
"Australia is, and will continue to be, a reliable supplier of resources around the world. Australia's exports of coal to China in the fourth quarter of 2018 were higher in volume and value than the same period in 2017."
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