Japan warns against NSW coal reserve - YouTubeAustralia should...

Japan warns against NSW coal reserve - YouTube

Australia should be selling its coal ‘overseas’ instead of ‘hoarding’ it - YouTube

Spot thermal prices have reached parity with 1-year futures with significant discount to thermal prices from a month ago. I do not think this is a coincidence given the timing of governments 10% coal quota for the domestic market and Japan's livid stance towards the governments forced market intervention.

Japan has mentioned that it will seek alternative suppliers if this constant government intervention is not stifled. We can see why there has been a delay in implementation of the 10% quota by government. The spot market weakness could also be attributed to Japan either sourcing coal from elsewhere (even if temporarily) or boycotting Aussie coal as a retaliatory measure in hopes of teaching AU Gov a "lesson". The lesson won't work as politicians cannot garner votes and power by foreseeing a crisis and preventing it, but rather through knee jerk reactions to an imminent cataclysm do they instil fear in the people and portray themselves as the righteous saviours.

If Japan is sourcing its coal from elsewhere, the real question is where is that elsewhere from? The only other logical supplier of high-quality coal for Japan is Russia! Could the Japanese be eating up Russian coal with an insatiable appetite before the scheduled complete ban on Russian coal imports later this year? Prior to Ukraine, Russia did supply Japan with 11-15% of their total coal demand.

If China could do a backflip on Australian coking coal in a matter of days, why can't Japan do the same with Russian coal? It clearly seems that our ignorantly detached political class is helping Japan realign itself with Russia.