China coal testing regime ‘significant impost’ on free trade, BHP says – by Amanda Saunders (Australian Financial Review – November 1, 2015)

The world’s biggest exporter of metallurgical coal, BHP Billiton, says China’s import-coal quality testing regime is a “significant impost” on free trade and some rivals are being forced to sell rejected cargoes at “distressed” prices.

Shaun Verner, BHP’s vice-president of marketing for coal, told Fairfax Media the testing was hurting sentiment and making it “much more difficult” and slower to sell tonnes into China.

BHP has not had a cargo rejected, but Mr Verner said “our understanding is that where some cargoes have been rejected, and we have heard through the market that there have been a few, they have had to be reloaded and resold as distressed cargoes in other markets.

“If you take the general market situation, and price where it is, the risk of having a cargo rejected is not something that people are willing to bear.”

Metallurgical coal has crashed another 26 per cent this year to about $US80 a tonne – far from the $US300 a tonne it was trading at four years ago.

A government push, led by Trade Minister Andrew Robb, to conduct the testing in Australia has so far failed to win Chinese support. The Minerals Council of Australia continues to lobby for change, after China would not agree with its request four months ago for the quality testing to be suspended, to give officials from both countries a chance to “assess the situation”.


“It’s all sentiment based. It’s much more difficult to get your material in,” Mr Verner said.

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