Coronado Global Resources chief financial officer Gerhard Ziems said there had been plenty of rumours about an end to the two-year ban on Australian coal imports but he put greater store in the latest reports.
may be set to end, citing Foreign Minister Penny Wong’s visit to China in December and market fundamentals that point to the need for the product at steel mills and power plants.
“We had these rumours last year already and this one is another rumour, but I feel it has a lot more substance after Penny Wong’s visit to China. The Albanese government responded tentatively to the reports, which late on Wednesday buoyed the share prices of major exporters. China is the world’s biggest user of coal, representing 53 per cent of the global total.
All three stocks fell sharply when the ASX resumed after the Christmas break on news the European winter would be milder than expected. That led to a fall in the spot price of oil, coal and natural gas. “What is likely to happen is a re-alignment of the patterns of global trade back to the pre-ban situation. China’s increased demand for Australian coal, however, should help our coal export prices to a degree, as the price premium for better quality coal that Australian tends to produce is enhanced.”
“We think it is likely that met coal trade flows will revert and China’s steel mills will buy premium quality Australian steelmaking coal again if allowed to do so, pushing Canadian and US met coal back into its original markets,” Morgan Stanley said.“This could initially mean a stronger pull on Australian met coal along with higher prices, especially if we also see some recovery in ex-China steel production, but this dynamic should fade eventually as trade flows revert/normalise.
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