CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Why ASX-listed coal stocks plunged on Tuesday

Australian-listed coal miners saw their share prices plunge after it was revealed that that Beijing had officially blocked Australian coal imports.

After the markets closed on Monday, December 15, news began to circulate that Beijing had officially blocked Australian coal imports.

This unofficial news comes as ships filled with some $700 million worth of Australian coal had been stranded off the coast of China over the previous few months, with the Chinese government saying that this was due to quality issues, according to the ABC.

For reference, in 2018-19, Australia exported some $14 billion worth of coal to China.

Why block coal imports at all?

Trade tensions have continued to escalate between China and Australia over the last few months. In addition to those stranded ships, China most recently slapped duties of between 107.1% to 212% on Australian wine imports.

The revelation that Beijing had officially banned Australian coal imports marks an escalation of these issues.

This speculation, which was not formally announced, appears to have been confirmed by the Chinese tabloid – the Global Times – which overnight ran a story titled: China extends full open gesture to imported coal except for Australia.

Here, Wang Yongzhong, Director of the Institute of Energy Economy, in speaking to the Global Times, said:

‘Since Mongolia has a geographic advantage that allows lower transportation costs than any other exporters, it could take a large share from Australian coal, as the relationship between China and Australia has been deteriorating and Australia is gradually losing the Chinese market. Domestic suppliers can also grab some market share’

Adding further colour to the reasons behind this block, Wang Yongzhong said:

‘China planned to reduce 100 million tons of coal consumption annually by 2030 to finally accomplish its carbon-neutral goal before 2060, which means fading demand in the coal market. An absence of Australian coal in China is actually beneficial to all other market suppliers,'

The Australian government was blindsided by this news, with Trade Minister Simon Birmingham saying he was ‘deeply troubled’ by the reports of the coal ban.

As Tuesday progressed, Mr Birmingham is reported to have said:

‘It is certainly unacceptable to see a circumstance where governments, businesses find out about decisions of other businesses or other governments, purely via media outlets.’

New Hope Corporation, Yancoal Australia and Whitehaven Coal share prices fall

While the ASX traded modestly lower on Tuesday, ASX-listed coal stocks, including Whitehaven Coal (WHC), Yancoal Australia (YAL), and Yancoal Australia (NHC) all saw their share prices plunge in response to the news of the import ban.

A little before noon, Whitehaven Coal was down 7.00% to $1.50 per share, New Hope Corporation had dropped 9.90% to $1.32 per share, while Yancoal was down a substantial 9.64% at $2.25 per share.

Want to take a position in ASX-listed coal stocks – long or short?

Create an IG trading account or log in to your existing account to get started now.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.