Fears as price of coal on decline
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 after yesterday’s release of the Deloitte Access Economics business outlook report.
The report warned Australia’s economic recovery would depend on how long it takes Melbourne to control its most recent COVID-19 outbreak.
While consumers spent 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 well during 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”.
“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 said 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 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.”
The Deloitte report recommended the extension of the Federal Government’s Jobseeker payment to help the country ride out the recession.
“The complexity of exiting from this emergency is high,” the report said.