THE impact of coronavirus upon Chinese mines means that nation may have to increase imports of coal from Australia, analysts Banchero Costa report.
According to BC, China’s domestic coal mines are struggling to boost production in the face of the epidemic.
“That’s a situation that may seem positive for seaborne exporters, but in reality, it may be challenging for miners to take advantage,” BC reported.
“While there may be increased demand for imported coal in China in the coming weeks, the problem for major exporters such as Indonesia, Australia and the US is going to be one of the logistics.
“The coronavirus is starting to have an impact on supply chains and will make it more challenging for shippers to find vessels to go to China.”
According to BC, even if exporters do get their goods to Chinese ports, they are likely to face headaches in unloading cargoes and transporting them from docks to end-users.
“While the fatalities and infections draw headlines, the impact of the virus is starting to cascade through China’s economy, as well as businesses in countries that trade heavily with the world’s largest consumer of commodities,” BC reported.
According to the Reserve Bank of Australia, Australia produced around 510m tonnes of coal in 2017/18, of which around 75% (380m tonnes) was exported.