Australian Prime Minister Scott Morrison on Tuesday said that China's ban on the imports of Australian coal would violate World Trade Organization laws, as his administration called on Beijing to resume discussions to ease the two sides' deepening diplomatic frictions, Bloomberg News reported.
The government-run Global Times newspaper disclosed in a report late Monday that China's top economic planner had authorized power companies to import coal without clearance restrictions - except for Australia.
Australia's coal exports are valued at over $14 billion. Thermal coal used by Chinese power grids accounts for around $4 billion of that figure.
Stocks of Australian coal companies plunged early Tuesday, with Whitehaven Coal Ltd. settling nearly 6% lower in Sydney trading and Yancoal Australia Ltd. retreating 8.5%.
Based on reports, China will put more premium on importing coal from Russia, Indonesia and Mongolia, with power companies sharing inventory to guarantee prices don't go over 640 yuan ($97.8) per ton.
Australian government sources said such news reports should be treated seriously because they're generally under the control of the Chinese government. Beijing has unofficially prohibited the imports of Australian coal since October this year, rendering almost 50 bulk carriers anchored off the Chinese coast.
The Global Times quoted Wang Yongzhong, chief of the Institute of Energy and Economy at China's Academy of Social Sciences, who warned that Australia is "gradually losing the Chinese market."
According to Australia's Trade Minister Simon Birmingham, the government has witnessed "a pattern of disruption in connection to Australian trade with China generally," Reuters quoted the official as telling reporters, Tuesday.
Leading economist Chris Richardson said Australian spot coal prices had increased by $18 per ton since Nov. 30 in the face of worries China may carry out some action against Australian iron ore, which could result in markets "nervously bidding up prices."
