China Bans Australian Coal Imports as Political Relations Sour

China Bans Australian Coal Imports as Political Relations Sour

China has suspended purchases of Australian coal, according to people familiar with the order, as Beijing continues to tightly control imports of the fuel amid soured political relations with Canberra.

Chinese power stations and steel mills have been verbally told to immediately stop using Australian coal, the people said, asking not to be identified as the matter is private. Ports have also been told not to offload Australian coal, one of the people said. China’s customs administration wasn’t immediately available to comment.

The ban marks an escalation in tensions that have already jolted agricultural exports from China’s biggest supplier of commodities. It isn’t clear when the halt might end or how it might affect long-term contracts that are already in place.

The fossil fuel has been a previous target for China’s ire with what it regards as an increasingly hostile government in Canberra, most recently in 2019 when shipments became subject to port delays. It’s one of the few resources in which China is largely self-sufficient, as it mines and burns about half the world’s supply, and its utilities use lower-quality thermal coal for just a small fraction of their needs.

Higher-quality coking coal is a different story. China produces less of it and the country’s steel-making giants are still reliant on overseas suppliers, where Australia is dominant, typically accounting for over half of imports.