The largest story breaking in the new year for dry bulk has been a reported partial lifting of China’s unofficial ban of Australian coal which has been in place since 2020. What impact this partial lifting of the coal ban has on freight rates remains questionable.
It’s the latest positive step between the two nations after Australian prime minister Anthony Albanese met with Chinese president Xi Jinping in November and foreign minister Penny Wong held a meeting with her counterpart in Beijing last month. The two countries had fallen out over the origins of covid leading to a range of products being banned on the mainland.
According to Braemar, only a “handful” of state-owned utilities have been allowed to contract with Australian miners, implying trade will not return to pre-ban levels. Australian miners have been able to secure plenty of replacement customers in Europe, while in China local miners have been ramping coal output over the past year.
“While the reopening in China will increase the country’s energy demand, we expect the strong domestic output and less logistical disruptions to keep seaborne demand subdued,” analysts at Braemar suggested in a new dry bulk report.
