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Miners drag Australian shares lower on reports of China restricting coal imports

Published 15/12/2020, 05:00 pm
Updated 15/12/2020, 05:06 pm
© Reuters.

* China steelmakers call for investigation into iron ore prices

* Benchmark stock index closes near two-week low

* Coal exporters New Hope , Whitehaven slump

* NZ bourse at one-week closing low (Updates to close)

Dec 15 (Reuters) - Australian shares slipped on Tuesday, with miners incurring majority of the losses on reports that China was restricting coal imports from Australia, and on news of calls for higher regulatory scrutiny over surging iron ore prices.

The S&P/ASX 200 index .AXJO fell 0.4% to 6,631.3, its lowest close in nearly two weeks, after Chinese media outlets reported that the country's top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia. is the third biggest export from Australia, which has been embroiled in a diplomatic dispute with its largest trading partner China.

Further hurting miners in Australia, China's steel producers called for regulatory investigation into a recent jump in iron ore prices. Benchmark Dalian iron ore futures DCIOcv1 had jumped for a fifth straight week last week, rising nearly 10% on Friday. companies have seen a capitulation in investor sentiment as the Chinese bans on all Australian coal have seen a savage sell-off," said James McGlew, executive director for corporate stockbroking at Argonaut.

"No question that the Chinese bans and tariffs slapped on a range of exports from Australia have spooked the horses and for the time being they continue to run away."

Australian miners .AXMM lost about 2.1%, their biggest since Nov. 10, with BHP Group BHP.AX and Rio Tinto (LON:RIO) RIO.AX shedding 2.3% and 1.3%, respectively.

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Pureplay coal exporters fell sharply, as well. New Hope Corp NHC.AX ended 2.7% lower, China-controlled Yancoal Australia YAL.AX shed 8.4%, and Whitehaven Coal WHC.AX lost about 6%.

Heavyweight financials .AXFJ slipped, with all the "Big Four" banks ending in negative territory.

In New Zealand, the S&P/NZX 50 index .NZ50 declined 0.5% to 12,767.17, its lowest close in a week.

Blue-chip stocks were among the top drags. NZ-listed shares of Westpac Banking Corp WBC.NZ lost 1.7%, while Spark New Zealand SPK.NZ declined more than 2%.

Latest comments

Maybe because Xi would lose face, not the people under the CCP rule, because china were instrumental in setting up the iron spot price years ago rather than yearly contracts.They may also be (on the secret) enjoying the yuan strenthening.
The question on iron ore prices has puzzled me for ages. Given there are multiple sellers and vitually only one buyer for the vast bulk of ore dug up - China - you would think that China could just dictate their price; ie name their price and say take it or leave it to suppliers? I suspect there is massive futures market speculation / manipulation going on in China and elsewhere. The buyers though could just call the markets bluff if they so chose and reject higher priced ore.
Why did it take so long for coal miners to fall? We have known of the hold up of aussie coal ships at Chinese ports for weeks?
Its probably because it wasn't formally acknowledged by China
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