China coal ban may not be tied to diplomatic tensions, Frydenberg says

China coal ban may not be tied to diplomatic tensions, Frydenberg says

Tensions arose in 2017 when Canberra accused Beijing of meddling in its domestic affairs, and the relationship suffered another setback past year when Australia banned China's Huawei from its 5G broadband network. Prices for low sulfur premium coals in particular would rise as importers scramble to replace Australian coals.

"Australia would account for most of the volume reduction as it represented more than 75% of China's seaborne metallurgical imports in 2018".

The US is reportedly seeking to secure a pledge from China that it will not cut the official value of its yuan as a part of a trade agreement.

Birmingham said Chinese import quotas, combined with the testing of products for quality assurance, "may be slowing down the processing of coal in certain ports across China".

"The goal of this is to better maintain Chinese import enterprises' legitimate rights and interests and to ensure environmental safety", Geng said.

The dollar index versus a basket of six major currencies was a touch lower at 96.451, after shedding about 0.4 per cent overnight.

They told Fastmarkets MB earlier this year that the extended customs clearance process at northern Chinese ports was singling out Australian coal, albeit unofficially, amid simmering tensions between the two trading partners. "Attempts by participants to price in potentially dovish FOMC (Federal Open Market Committee) meeting minutes are also keeping the dollar on the defensive", said Yukio Ishizuki, senior currency strategist at Daiwa Securities.




A Chinese Foreign Ministry spokesman, Geng Shuang, said the port restriction was "normal practice" and the restriction was to protect the importer's right and the environment.

Australia banned Huawei in August a year ago, recently revoked the permanent residency of a Chinese billionaire over concerns that he's an agent of influence and is pressing the Chinese for access to Australian citizens and permanent residents held in prison or trapped in Xinjiang. Yancoal closed 2.8 per cent weaker, New Hope lost 3.3 per cent, Stanmore Coal was down 2 per cent and Coronado Coal was off 3 per cent. Glencore, a major coal producer, was down more than 3 per cent in London on Thursday night but BHP Billiton stock was steady.

"This is not the first time that on occasion local ports make decisions about these matters", he told reporters in Auckland, where he is meeting with his New Zealand counterpart Jacinda Ardern.

Reserve Bank of Australia (RBA) Governor Philip Lowe had sent the Aussie tumbling early in February by stepping back from the central bank's long-standing tightening bias, saying the next move in interest rates could be either down or up.

Lowe, echoing analysts, said it was also important to note that the current amount of coal reportedly blocked by Dalian was small.

"For now, Australian coal can clear customs", he said, declining to be named because of company policy. He understood that the amount being blocked was equivalent to two months' worth of exports.

Plenty of conclusions are being drawn, including that China is making Australia the scapegoat for its trade dispute with the United States. "We have to wait to see what the underlying reasons are", he said at a parliamentary hearing in Sydney.

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