Lot’s of mixed messages around the impact on Australian coal from the China ban. Reuters sees it as bad:
Mac Bank is circumspect:
Thermal coal has recently been selling off on anticipation of a Chinese ban on high ash, high sulphur coal imports. Those fears were only partly allayed on Monday when China’s NDRC published official regulation on coal quality controls, effective 2015. The key points are: 1) For coal moved less than 600km (which is almost all imported coal), the strictest quality requirement is a maximum of 30% ash and 1.5% sulphur, versus a draft proposal of 15% ash and 0.6% sulphur; 2) The quality restrictions are for both domestic and imported coal and 3) Sales and use of coal with ash >16% and sulphur >1% in the three major coal consuming regions of Beijing-Tianjin-Hebei Delta, Yangtze River Delta (inc. Shanghai, Jiangsu, Zhejiang) and the Pearl River Delta (inc. Guangdong) is to be restricted/limited. Given that the nationwide quality restrictions are not particularly restrictive, Cal-15 Newcastle swaps saw a small boost on the news. However, the stricter local controls remain a concern, as it supplants the looser national limits for those important regions.
That sounds material and a very bad sign is the Pascometer going off but it’s really too early to say. Will keep digging.
Update: Good piece here from Tristan Edis arguing no impact. He puts Dad’s Army to shame.
