Copper price extends gain on Chinese recovery while US election looms
Prices climbed as much as 0.9% after China’s monthly services activity expanded at the fastest pace since July.
BHP Group has received deferment requests from Chinese coal customers, chairman Ken MacKenzie said on Wednesday, after reports that China had put a freeze on accepting Australian coal amid trade tensions between the two countries.
“We understand there may be some new developments relating to how China plans and moderates imports versus its own domestic coal production,” MacKenzie told reporters.
“Our commercial team has recently received deferment requests,” he told a briefing after the miner’s annual general meeting, adding, “It would be concerning if the rumours were true.”
Trade industry reports late last week suggested that some Chinese ports had been told not to accept either type of Australian coal
MacKenzie did not specify whether he was referring to BHP’s thermal or metallurgical coal.
Trade industry reports late last week suggested that some Chinese ports had been told not to accept either type of Australian coal, and that such shipments were being sold along to other markets at the last minute.
China’s coal imports had been expected to slow in the second half, after heavy imports earlier this year and weaker than expected demand due to coronavirus-related disruption, spurring China to act to support its domestic industry.
Customs data shows that China has taken less coal from Australia and also Indonesia in the past month.
Australian politicians have played down the issue, with Prime Minister Scott Morrison on Tuesday characterising China’s move to put quotas around imports as “not uncommon.” Australian coal shipments to China were delayed in February last year.
Australia’s ties with top trade partner China soured in 2018 when it became the first country to publicly ban China’s Huawei from its 5G network, and worsened after Canberra called for an enquiry into the origins of the coronavirus.
China is the biggest importer of Australian coal, taking 27% of its metallurgical coal in the year to June and 20% of its thermal coal, which the Australian government estimates was worth A$13.7 billion last year behind China’s iron ore imports which were worth A$84.9 billion.
(By Melanie Burton; Editing by Louise Heavens)
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