Coronado Global Resources says “multiple” Chinese companies are looking to buy its coal as China looks to ease its two-year ban on Australian imports.
It has been quite a start to the year for the Australian coal market.
Prices have remained strong after a bumper 2022, driven largely by a global energy prices and shortages cause by the Russia–Ukraine war.
The other big-ticket item in January 2023 has been news that China is set to end its unofficial ban on importing coal from Australia.
Reports on January 5 indicated three central government-backed utilities and China’s top steelmaker would be allowed to resume imports. That news was followed on January 9 by a breakthrough order for Australian coal from China Energy Investment Corp, which analysts believed may open the door to further deals in the near future, though they urged caution.
Now, according to new reports, Coronado says “multiple” Chinese customers have sought to buy its Queensland coal, further fuelling confidence that Australian coal will soon be flowing to what was its second biggest customer.
According to the Australian Financial Review:
Coronado chief financial officer Gerhard Ziems told investors on Tuesday the company had received enquiries from “a number of parties”.
In a reference to reports that China would allow only some of its steel makers to resume purchases of Australian coal, Mr Ziems said the identity of those potential customers was “not only the officially approved parties”.
The comments suggest a broader sector of the Chinese steel making industry believe they will soon be able to resume trade with Australia, which is the world’s biggest exporter of coking coal with a market share of about 56 per cent.
Ziems’ comments come after Coronado’s latest quarterly report indicated that China resuming metallurgical coal imports would likely push seaborne coal prices higher in the short term.
“Coronado expects Australian met (metallurgical) coal imports to China to return in 2023 and displace lower quality and higher cost Chinese domestic or US met coal production, particularly to the Chinese steelmakers in southern regions,” the Queensland-based company said.
“Coronado anticipates that the resumption of Australian met coal imports into China will improve market dynamics as well as increase competition for Australian coal and will likely push up seaborne coal prices in the short term.”