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China's instruction to state power-plants to use local coal is worrying for Australian exporters. Australia’s Deputy Prime Minister Michael McCormack is concerned coal exporters could face a tougher time selling the commodity into China. Mr McCormack said Trade Minister Simon Birmingham and diplomats were attempting to fix the issue. He told ABC “Of course we're very concerned by it. But we have a two-way relationship with China. China needs Australia as much as Australia needs China and we want to make sure that whatever we do is in a careful and considered way."
The Chinese government is reportedly warning state-owned power plants not to buy new shipments of Australian thermal coal and instead favour domestic products.
China cooling on Australian coal could signal the latest escalation in trade tensions between the two nations.