Is the boat really not coming? Australia's trade ban fell, a large backlog of ships diverted
According to Splash247, the Chinese government is blocking an increasing number of Australian products and commodities from Entering China, creating a backlog of ships and diverting them to other markets.
In May, the Chinese government imposed an 80 percent tariff on barley purchases.Last month, Chinese factories and utilities were told to stop using Australian coal.
"These rumours have not been officially confirmed, but we do see Chinese users reselling goods that have not yet arrived and cutting back on further purchases because of concerns they will not be able to clear customs," Braemar ACM said in a dry bulk update yesterday.Many of the goods were diverted to India or Vietnam, while others continued to wait outside Chinese ports."
This week, shipping companies reported that another unofficial ban on coking coal had gone into effect.
Traders have been verbally told to stop buying Australian wine, lobster, copper, sugar, fruit and timber.The Chinese government has yet to issue an official statement on the ban, but the state-run Global Times newspaper confirmed the "import suspension" in an article late on Wednesday.
Chinese state-owned and private wheat traders have stopped trading In Australian wheat.China is expected to import 7.5 million tons of wheat in 2020-2021, while Australia will produce 29 million tons and export about 18.5 million tons.
"Even though only 8 per cent of Australian wheat is going to China, this will cause further disruption to the dry bulk shipping market," broker Lorentzen & Stemoco said in an update to clients today.
The winner from Australia's coal ban is Russia.In the first 10 months of this year, China's coal imports from Russia rose 40 per cent year on year.However, Russia's production capacity is not enough to make up for all the coal Australia may be missing.This could mean more long-distance coal trade between Canada and the US, while more coal from Mongolia is likely to enter China by road, said Braemar ACM.
