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After being loaded with coal, the DZ Weihai slipped into turquoise waters off the coast of Australia this month and embarked on a 14-day journey to the southern Chinese port of Yangpu. How long the ship waits on arrival to unload its cargo, someone advises.
Despite a Chinese ban on coal imports from Australia, there are about 70 ships, 1,400 seafarers and 6.4 million tonnes of fuel abroad, but some vessels continue. While the stranded cargo and crew are caught between authorities who will not let them download and buyers who will not let them leave are perhaps the most curious of all who manage additional deliveries.
The DZ Weihai and Jin Lang vessels en route to China.
Although everyday matters such as contractual commitments play a role, traders are likely to be motivated by a mix of hope and money. China considers it can facilitate the acceptance of loads that arrived before the ban, which increases the restrictions on optimism. If they do, a windfall awaits because the gap between Chinese and Australian coal prices has widened to a record.
“Chinese buyers with stranded loads are reluctant to resell them because the cost of these loads is so much less than domestic prices,” said Rory Simington, chief analyst at Wood Mackenzie Ltd. the cost, including the debit right, will still be much lower than the local prices currently. ”
A shipment of 100,000 tons of charcoal from Australia would cost a trader about $ 14 million, based on prices carried in the sea, not including transportation costs. The same amount purchased in the local market would amount to about $ 28 million. The cost of downloading a bulk carrier, known as a compensation fee, is between $ 13,000 and $ 17,000 daily.
The Australian ban has never been publicly recognized by Beijing, making the start of the start date difficult. Chinese power plants and steel mills were verbally told to stop fueling in mid-October. Authorities have also ordered retailers to stop buying a raft of the country’s merchandise, including coal, from November 6.
China’s customs administration did not immediately respond to a request for comment.
Since October 15, 20 ships have loaded coal in Australia and this month indicated destinations in China, including the DZ Weihai, according to shipping data compiled by Bloomberg. Some of them, such as the Rixta Oldendorff, redirected during the voyage to other lands. But at least 11 have joined the larger flotilla waiting outside Chinese ports to disembark.
China’s ban on Australian coal has dramatically changed the global flow of commodities: mainland buyers ordered several South African coal loads in December and increased imports from Indonesia and Russia. The value of China’s purchases of Australian coal last year dropped by 16% to $ 7.9 billion.
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About 6.4 million tonnes of Australian coal have been stranded off the coast of China
Source: Kpler
Yet China a person familiar with the situation is considering accepting some Australian coal loads that arrived before the import ban went into effect. The deliberations are in the early stages and approval of senior leaders is required. The person said that the broader ban on Australian coal was in force and that the loads were being resold to buyers in other countries.
“It is interesting to see new coal trade done recently, despite no clear signal that China’s ban on Australian imports will be canceled soon,” said Monica Zhu, an analyst at Kpler in dry bulk. “These are individual trader activities and may not represent the mainstream market.”
– With the help of Dan Murtaugh, Matt Turner, Winnie Zhu and Serene Cheong