China has shut the door on coal imports until at least next year, creating uncertainty in the Australian market, according to one industry analyst.
Limits to imports were initially put in place in the middle of this year but now Chinese authorities have stopped all imports of coal from across the globe and the ban is not expected to be lifted until early 2019.
Mike Cooper from Platts Coal Report said there was an oversupply of coal in China.
He said unless there was a very cold winter, further imports would not be needed for the next couple of months at least.
"China has produced so much coal for the winter period the power companies have 30 days worth of consumption on their stockpiles," he said.
"It's really creating tidal waves of uncertainty in the market."
Thermal coal prices for delivery to China have dropped significantly as a result, falling from $90/tonne in February to $60/tonne.
China takes about 25 per cent of Australia's thermal coal from the Newcastle port and Mr Cooper said finding a home for that coal would be difficult.
"The prices aren't high enough to switch Australian coal to India so people are wondering where these Australian shipments can go," he said.
The current situation is at odds with a report released earlier this week the International Energy Agency (IEA).
Its World Energy Outlook (WEO) forecast strong growth in Asian demand through to 2040 with substantial growth in India and South-East Asia expected to counteract projected falls in China and Japan.
At the beginning of the month, the NSW Minerals Council released a statement saying prices were steady at around $114/tonne compared to around $49/ tonne in January 2016.
According to the Council demand for New South Wales coal is particularly strong from traditional Asian markets such as Japan, Taiwan, and Korea.
However, Mr Cooper said prices for Japanese grade coal dropped recently from $125/tonne to $100/tonne.
