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Australia forecasts coal export drops in FY 2020-21 for China's restriction


Australia forecasts a sharp fall in coal export revenue this year due to China's restriction on importing Australian coal, according to official Resource and Energy Quarterly released on December 21.
 
Met coal export revenue is expected to slump 35% year on year to A$22 billion ($17 billion) in FY 2020-21 (July 2020-June 2021), the report said. The expectation is A$1 billion lower than the previous one in September, as prices for met coal fell in fourth quarter.
 
Thermal exports revenue is forecast to decrease to A$15 billion from A$20 billion in FY 2019-20, and it is expected to rebound slightly to A$16 billion in FY 2021-22.
 
China is the second-largest importer of Australian thermal and coking coal. However, Australia's coal exports were heavily hit by restricted customs clearance and prices have fallen for exacerbating relationship between the two countries.
 
China's top economic planner the National Development and Reform Commission (NDRC) had allowed power plants to import coal and asked customs to speed up clearance at ports, except Australian cargoes.
 
Australian coal producers may start to cut production if China keeps the curbs on Australian coal.
 
"The bottom line for Australian coal producers is lower profitability and the likelihood of production cuts the longer the Chinese restrictions remain in place," the report said.
 
Met coal production is expected to be 179 million tonnes in FY 2020-21, lower than 184 million tonnes in FY 2019-20, and to tick up to 192 million tonnes in FY 2021-22.
 
Thermal coal output is forecast to total 259 million tonnes in current fiscal, lower than 268 million tonnes in FY 2019-20, and to rise to 276 million tonnes in FY 2021-22.
 
Source:sxcoal

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