Australia's ties with China have deteriorated since 2017, when Canberra accused China of meddling in its domestic affairs. Tensions rose again last month after Australia rescinded the visa of a prominent Chinese businessman, just months after barring Chinese telecoms giant Huawei Technologies from supplying equipment to its 5G broadband network. Coal is Australia's biggest export earner and the Australian dollar tumbled more than 1 percent to as low as $0.7086 on fears the Dalian ban would hurt its already slowing economy.
Asked if the ban was related to bilateral tensions, Geng Shuang, a spokesman at China's foreign ministry, told reporters on Thursday that customs were inspecting and testing coal imports for safety and quality. "The goals are to better safeguard the legal rights and interests of Chinese importers and to protect the environment," Geng said, adding that the move was "completely normal".
Imports through Dalian comprise only 1.8 percent of Australia's total coal exports, but if the reported ban reflects a more significant deterioration in the trade relationship between Australia and China, then it could have a broader impact, said Ivan Colhoun, chief economist of markets at National Australia Bank, in a note on Thursday.
Five harbours overseen by Dalian customs - Dalian, Bayuquan, Panjin, Dandong and Beiliang - will not allow Australian coal to clear through customs, said the Dalian port official. Coal imports from Russia and Indonesia will not be affected.
"I'm aware of unconfirmed and unsourced media reports and have asked our Ambassador in Beijing to urgently clarify their veracity," said Australia's Minister for Trade Simon Birmingham. "We continue to engage closely with industry on matters of market access ... China is a valued partner of Australia and we trust that our free trade agreement commitments to each other will continue to be honoured."
Birmingham also said that Australia's exports of coal to China in the fourth quarter of 2018 were higher in volume and value than in the same period in 2017. The Dalian ports handled about 14 million tonnes of coal last year, half of which was from Australia, said Gu Meng, an analyst at Orient Futures.
The Dalian official declined to be named due to the sensitivity of the matter. Neither Dalian customs nor the national General Administration of Customs immediately responded to a request for comment. The Dalian official said he was not given a reason for the ban on Australian imports.