Will be interesting to see what they do (or dont) to the wheat harvest.
Makes one wonder when/if the Adani mine will be “paused”. China stopping imports of thermal coal, scores of loaded ships full of it floating around going nowhere; could Adani (or other power stations) pick up that coal at such a lower rate that no longer worthwhile building a new mine? International relationships and brutal business could render the mine surplus quite apart from green politicsDon't let the "China isn't taking our coal, coal mines will close" BS trick you into thinking we are exporting less coal and prices are dropping.
A few points to remember
- China bought 20% of Australian coal, if I recall ~80mtpa. You cannot just find 80mtpa of coal from somewhere else even over a few months.
- Any coal they are buying to off-set Australia coal is limited, mostly spot price from what ever stockpile is available and Australian coal will fill the gaps to non-Chinese buyers. In addition you can bet your bottom dollar the Chinese traders who buy the coal and currently doing swaps at sea.
- The spot price for thermal coal is rising from 5 year equal lows caused by CV-19.
- China won't let the loaded coal ships in its waters leave, read that to be, they want that coal.
- China is currently going through a series of power outages due to lack of coal, its hurting them far more than us.
China is very much on the back foot in this which is why they have selectively expanded the ban to other exports, but not all. They haven't banned LNP, uranium or iron ore. Even if China was to fully block all Australian imports, they will loose alot more than us, especially if Australia was to reciprocate.
What i dont understand is how China can step back from this and save face. Because we are not going to be doing what they want in a hurry and kowtow....
Okay, this is going to read bit like the Game of Thrones...
China is playing the long game and won't be stepping back - Xi Jinping has begun moving geopolitical chess pieces in a match that hasn't been played in the Pacific since 1945.
There's a lot of moves, but China's goal is to become the sovereign and determing power across the Western Pacific Rim, filling the vacuum of a weakened United States too busy with its own internal strife - and achieving what its nemisis, Japan, couldn't in the 1930s and 1940s. Stifling Australia's economy will go a long way towards impacting Australia's military presence on the edge of China's and North Asia's primary oil shipping routes from the Middle East, and make other middling South East Asian economies think twice about pressing Chinese claims on their territories.
This is really only the beginning.
If Australia remains committed to an aliance with the United States and Japan, then China will work very hard to make Australia some sort of pariah state on the global stage - particularly to Arab oil states (Exhibit A - the Afghanistan SAS debacle). With zero strategic oil reserves - an oil embargo, blockade or sanctions could easily have most Australians eating lawn clippings within a month or two. This is a vulnerabilty that makes Australia a far easier target at this very moment in time than many of our immediate neighbours with oil and refining capacity.
And while we might expect reaction and intervention from the United States - you have to ask yourself, would a future US President with a hostile Senate, Congress or insular population really want to start a Pacific War over Australia, particularly if China succeeds at a global level with Operation Pariah State?
The good news is - for the interim at least - we should see a lot less rollingstock sourced from the Middle Kingdom.