How much China hates Australia: US $6 billion per year

How much China hates Australia: US $6 billion per year. By David Archibald. And that’s just in coking coal.

Last October, the Chicoms banned the import of Australian coal, barley, wine, crayfish, timber, cotton and beef. These are things they thought would do the most harm to Australia without it costing them too much.

They didn’t ban iron ore because the market is too tight — there are no other suppliers that could fill the gap if iron ore from Australian was banned. Similarly, China is the biggest sheep meat producer and consumer on the planet, at 5.0 mtpa and 5.5 mtpa respectively. There aren’t that many sheep meat exporters at scale — just New Zealand, Australia and Paraguay in that order. If the Chicoms banned Australian lamb there would be no other supplier to fill the gap. …

BHP is getting much the same price for its coking coal as it was last October when the ban started. The Chicoms are having to pay 50% more to get coking coal from the east coast of the United States in order to get any supply at all. That American coal would have normally gone to Europe. The European steel mills are now buying more of their coal from Australia. All the Chicoms have done is to distort normal trade routes, and they are paying for it. …

 

 

With a gap of US$100/tonne and Chicom coking coal imports running at 60 mtpa, the Chicoms are paying US$6,000 million annualised to punish Australia for not kowtowing to them. This is what they are paying to distort the market. BHP is still getting the same margin it was before the ban was put in place.

That US$6,000 million annually is a sign that they really do hate us.