▲ Coal mined from a coal mine in China 


China, which has an uncomfortable relationship with Australia, has decided to boycott coal and faced a midwinter power crisis.



The Wall Street Journal (WSJ) reported on the 10th local time that the crisis in China's coal market is intensifying, such as a surge in prices and a shortage of supply.



Since October last year, China has virtually stopped importing Australian coal by means of'oral notification' to power plants and steel mills, and in December it was formalized.



It was a retaliatory measure against Australia that has touched the Chinese government's heart, such as the decision to withdraw from Huawei's telecommunications equipment and the theory of responsibility for COVID-19.



It was the intention of hitting Australia, which exported $7.89 billion worth of coal to China last year (about 8.7 trillion won).



The problem is that China, the world's largest coal importer, relied on Australia for about half of its coal demand.



Chinese authorities ordered the coal industry to diversify its imports, but it did not go as planned.



Although coal from South Africa and Colombia were also imported, it is evaluated that the transportation cost is higher than that of Australia and the quality of the coal is insufficient.



Argus, a commodity and energy price research firm, said recently that a Chinese importer has also promoted North American coal imports.



North American coal costs $100 per ton more than Australian coal.



As of the end of January, the price of high-quality heating coal per ton in China has doubled compared to last year.



Coal accounts for 60% of China's electricity production.



China Methane Market Network, a consultative group of Chinese coal importers, recently issued a statement that "it is difficult to fill in insufficient coal stocks in a situation where demand does not decrease."



Accordingly, China recently held a meeting in Beijing with seven domestic coal producers to discuss coal supply issues.



Producers have said they will work to stabilize the coal market, but it will take time to meet actual demand.



Australian coal prices fell after China's decision to boycott, but prices also recovered as demand from other countries such as Japan and India increased, WSJ said. 



(Photo = EPA, Yonhap News)