Australian miners are likely to be under pressure after China announced it will impose a 3% tariff on coking coal and a 6% tariff on thermal coal from October 15.
Due to an ASEAN-China FTA, Indonesia is exempt from the tariffs but producers elsewhere will be levied.
The moves are aimed at propping up local Chinese miners and reflect a government keen to protect industry from tumbling prices and rising productions costs.
The Port of Newcastle is the biggest coal export hub in the world and producers in the nearby Hunter Valley, already buffeted by prices around $66 a tonne, will feel the impact of these tariffs.
Data from Port Waratah Coal Services on throughput in the Port of Newcastle shows that Japan remains overwhelmingly the largest destination for coal from the region. But, year to date data shows China clearly in second place as the destination for 23.38% of exports through the port.
Sky News reports that Trade Minister Andrew Robb is seeking clarity from China on the tariffs but it seems clear, given price action in US coal stocks overnight where the index was down 6.7%, that globally the market thinks there will be no major exemptions except Indonesia.
Hunter Valley mines have already been under pressure and decisions to shutter mines have been made this year. Overnight, Newcastle Coal futures trade on ICE saw the December contract fall 65 cents to $65.45 a tonne
This latest news will put further pressure on tight margins in the region.