China banning Australian coal imports might be one of the most peculiar commodity stories of 2021. At a time when commodity prices are climbing, Chinese authorities decided to drop Australian coal, leading to a surge in worse-quality alternatives just as regional demand peaks. Meanwhile, China’s aim of punishing Australia for calling for an investigation into the origins of Covid has largely failed as Australian producers simply rerouted their cargoes towards India. China, on the other hand, was forced to buy increasing amounts of Indonesian and Russian coal to accommodate domestic demand, triggering a more than 25% price hike compared to January levels. China is more or less self-sufficient in coking coal yet needs substantial amounts of thermal coal for its vast metallurgical industry. Technically, China has a plethora of options to choose from. Adjacent coal-rich Mongolia might have been one of the best and cheapest options, but the closed […]