It’s been almost two years since China enacted a painful ban on one of Australia’s largest exports, but things could be about to change.
It will be two long years in October since China decided to take a big step to punish Australia and one of its key exports. But now there are rumors that there are big changes along the way.
Beijing’s ban on Australian coal imports came at a time of great tension between the Chinese Communist Party and the then Morrison government, and has had a negative effect on the economies of both nations.
Australian exports account for 58% of world maritime trade or metallurgical coal, a vital ingredient in steelmaking.
Meanwhile, China loves to make steel, which accounts for 57% of world steel production by 2020.
It has not been a good move for any of the nations.
Australia lost its largest coal customer. And for China, since the ban went into effect, every million tons of coal used in its steel mills has cost more than $ 400 million ($ 590 million), compared to about $ 250 million. $ 370 million) paid for steelmakers in China. other parts of the world, only because of the Australian ban.
However, there are rumors that China may be preparing to reverse its unofficial ban on Australian coal imports in August or September.
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Nothing has been confirmed yet, but Australian coal mining companies are watching their share prices rise excitedly at the prospect of an investment.
In Thursday morning’s trading, New Hope rose 7 percent, Whitehaven gained 3.9 percent and South32 rose 2.6 percent.
Experts believe that China may want to do so to bring the price of metallurgical coal, now about 250 USD / ton (370 USD / ton), to the price of thermal coal, now about 430 USD / ton (630 USD). / ton).
Peter O’Connor said senior resource analyst at Shaw & Partners The Australian: “This would serve in some way to correct the price anomaly that has recently seen the price of coal (the premium coal supply) traded at a discount to thermal coal.”
Albanese stands firm in China’s demands
The rumored investment would mark a major breakthrough for Australia-China relations and would be a victory for the new Albanian government.
Scott Morrison’s push for an investigation into Covid’s origins did not go well with Beijing and further aggravated an already strained relationship between the two nations.
Prime Minister Anthony Albanese and Foreign Minister Penny Wong have stated that they want to repair some of the damage caused over the past three years.
However, the prime minister has said he will not simply give in to China’s demands to normalize trade relations once again.
Over the weekend, Chinese Foreign Minister Wang Yi issued Wong with a four-point list of demands to repair the relationship and
Foreign Minister Wang Yi blamed the “irresponsible” words and deeds for the difficulties in the relationship between China and the previous government led by Scott Morrison.
“The root of the difficulties in bilateral relations in recent years was the insistence of the former Australian government to view China as a rival or even a threat, allowing its words and deeds to be irresponsible against China. “, he said.
“The Australian side is expected to seize the current opportunity and take concrete action to reshape its proper understanding of China, reduce negative assets and accumulate positive energy for the improvement of China-Australia relations.”
After a meeting in Bali on Friday between Ms. Wong and Mr. Wang, which put an end to a diplomatic freeze that lasted for three years.
Ms. Wong said the meeting had been an “important first step” in “stabilizing” the relationship.
While China acknowledged it was a step in the right direction, it has called on Australia to meet four criteria to better heal the relationship, including that Canberra needed to see Beijing as a “partner, rather than a rival.”
In a statement in Canberra this week, Albanese said Australia would continue to cooperate with China wherever it could, but would not shy away from defending the national interest.
“Look, Australia is not responding to the demands. We are responding to our own national interest,” Albanese said.
“I will say that. We will cooperate with China whenever we can. I want to establish good relations with all countries. But we will defend Australia’s interests when necessary. “
– with Samantha Maiden
Read related topics: China