Loading However, he added that China had stepped up efforts to check the quality of imported coal. Australian Trade Minister Simon Birmingham said: "We welcome the confirmation from China’s Ministry of Foreign Affairs that reports of a ban or country discrimination are false. "We look forward to continuing to cooperate and work together to maintain our strong and mutually beneficial trading relationship." A telephone survey by a Chinese steel industry website found that, while there may be no ban, there were restrictions on imported coking coal at many Chinese ports, with Australia affected along with Russia.

Australian coking coal was not allowed to clear customs in at least three northern ports, the survey on February 13 revealed. Loading Australian government sources said that they would still attempt to find out through the embassy in Beijing what was happening. They said it was likely the slow-down in imports was related to Chinese domestic economic matters and the attempt to privilege local suppliers over imports because of an economic slowdown. The government had earlier declared it had no reason to think the halt in coal through the five harbours that make up the Dalian port area is an act of political retaliation over recent moves by Australia, such as banning telco Huawei’s from the coming 5G network, or strong recent comments over hacking. But informed sources acknowledged frustration over the lack of answers from Chinese authorities as to what restrictions are in place and the reasons behind them.

Trade Minister Simon Birmingham said he understood cuts were “being applied in a consistent way across all countries”, though Australia was still urgently seeking explanations. “We expect and would understand that the trade agreements that we have between Australia and China will continue to be consistently applied.” Trade Minister Simon Birmingham. Credit:Dominic Lorrimer “We’re looking to be reassured that these measures are applying consistently to all coal exporting nations who are importing product into China. We believe that that appears to be the case. We take that at face value and we’ll continue to work as co-operatively as we can with Chinese authorities.” Australia is understood to be concerned that China is giving a protectionist leg-up to its own coal industry at a time when it is also trying to constrain the over production of steel, in which coal is a major component.

While the first priority is getting clear answers as to what is behind the restriction, Australia is also looking at whether the move by China is consistent with the free trade agreement between the two countries and World Trade Organisation rules. Australia’s Ambassador to China Jan Adams was making enquiries and explanations were also being sought from China’s embassy in Canberra, Senator Birmingham said. The Mysteel website conducted a telephone survey of Chinese producers and traders found multiple cases of restrictions. "North eastern port 'A' - Not allowed Australian coking coal customs clearance," stated a chart published by the website. "Northern port 'A' - Not customs clearance allowed for Australian coking coal," it read.

In two eastern ports Australian coal faced restrictions such as extended customs clearance and limited time windows for boats to be unloaded. Southern ports were unloading coal, but facing delays of up to 45 days. Russian coal was impacted at one port. In most cases, only verbal notification was received by the ports and steel mills that import restrictions on coal were in place. Reserve Bank Governor Philip Lowe said the central bank believed China was controlling its steel production as its economy slowed, reducing the demand for coal and increasing competition among its local producers which were being protected by authorities.

China produces 50 per cent of the world’s coal, but it competes with Australian coal which is $30 a tonne cheaper. “My understanding that the amount of coal that is being blocked is the equivalent of two months of exports. If that is all we are talking about that is not going to derail the Australian economy,” he said. “If it was a sign of a deterioration of the underlying political relationship it would be much more concerning but I wouldn’t jump to that conclusion.” Resources Minister Matthew Canavan said the coal being held up in China could end up travelling to other markets such as Japan, Vietnam and South Korea. He said no-one from $67 billion-a-year export industry had contacted him with concerns.

China’s economy has been slowing as it wrestles with the United States over trade. While US President Donald Trump has threatened punitive tariffs, Australia has consistently called on the use of WTO rules and other transparent mechanisms to resolve issues. “You could take retaliatory action, but what’s the point?” one Australian senior source said on Friday. Australian officials’ frustration is aimed at the labyrinthine and opaque Chinese system that does not operate consistently and transparently, a well-informed source said. “There is no reason to believe that is not consistent the with previous practice of Chinese authorities to protect their domestic industry,” he said. “I am confident that the future for Australian coal exports is very strong.” Respected China analyst Richard McGregor of the Lowy Institute said while he couldn’t rule out that Beijing was sending a political warning, there were clear domestic reasons why China was limiting coal imports.

The country’s coal market was “massive and very complex” and needed constant recalibration, he said. Also, China was unlikely to want a trade fight with Australia when it was already battling the US. An analyst in Zhejiang, southern China, said the stockpile of domestic Chinese coal would reduce any impact of import restrictions in the short term. "For mid and long term, I think the restriction will eventually be lifted. Current tension in trade will not last for long as the domestic need is steady," he said.

Both analysts had heard rumours that Australian coal was facing delays because of political friction. One said, "it is like the Sino-US trade war and things will improve in the future". Dalian Port had imposed an import quota because last year it was being used for customs clearance for coal destined for other regions, such as Tianjin and Tangshan, which brought not benefit to Dalian's own trade volumes, one analyst said. The 12 million-tonnes cap is based on Dalian's own coal needs for its local steel mills, he said. Another coal price analyst in China said: "There is no clear explanation of why Australian coal is restricted." The import restrictions were expected to last until June, the analysts said.