Coal price pain compounded by China tension: Economist

THE state’s COVID recovery could be hampered by China’s increasing preference for coking coal from Russia, Mongolia and Mozambique.

That was according to Deloitte’s leading economist Chris Richardson ahead of Monday’s release of the Deloitte Access Economics business outlook report.

The report warned that Australia’s economic recovery would depend on how long it takes Melbourne to control its recent COVID-19 outbreak.

While consumers have been spending more than forecast in March, they could be spooked by a rampant second wave of the virus.

Mr Richardson said Queensland’s resources sector, which had been performing strongly during the start of the pandemic, could start to feel a shift.

He said falling coal and gas prices and China’s threats raised “a big question mark over the head of Queensland’s biggest customer”.

More stories:

Why mining will heal Mackay quickly after COVID-19

Wage cutting stripping millions from mining regions

Miners to become backbone of Qld economic recovery

Chris Richardson from Deloitte Access Economics. Picture: Richard Jupe

“The prices of Queensland’s major commodity exports – coal and gas – have also been left wanting,” Mr Richardson said.

“While coal prices have been falling for a while, the global COVID-induced slowdown in industrial production is a worry.”

Mackay businesses are already starting to feel the strain from falling coal prices and coronavirus shutdowns.

Resource Industry Network acting managing director Mark Walter told the Daily Mercury some businesses had been affected more than others.

“I have spoken to a number of our members, some are very busy and have quite a good schedule of work in front of them and some are certainly starting to feel the effects of the falling coal price and COVID-19,” Mr Walter said.

Mr Richardson said this could be compounded by China’s increased turning to Russia, Mongolia and Mozambique for its coking coal supply.

Dawson MP George Christensen said mining companies he had spoken to were not ‘ripping their hair out’ and sacking people.

Dawson MP George Christensen said mining companies he had spoken to were not ‘ripping their hair out’ and sacking people.

Dawson MP George Christensen said the mining companies he had spoken to were not “ripping their hair out and sacking people”.

“We know that this situation is temporary, this slowdown has been induced by responses to the pandemic,” Mr Christensen said.

“Mining companies are analysing the situation, knowing it is temporary and not making any moves.”

He said instant infrastructure stimulus measures such as the fast tracking of road building projects would help provide jobs for some contract mine workers who had recently been let go. 

Mackay MP Julieanne Gilbert said the situation highlighted the need for a diverse range of industries in Mackay.

“It’s really important that everyone who is eligible takes up the State Government’s grants for small so we can keep growing our small businesses,” she said.

The Deloitte report has recommended the extension of the Federal Government’s JobSeeker payment to help the country ride out the recession.

Subscriber benefits:

Your questions about the new Daily Mercury format answered

How to make the most of your digital subscription

Daily puzzles and Sudoku another reason to stay subscribed

“The complexity of exiting from this emergency is high,” the report said.

“So, over and above existing reasons to have higher unemployment benefits anyway, keeping JobSeeker stronger for longer will be vital in filling the cracks as emergency safety nets morph or disappear.”

Source link

Recommended Posts