Coal has sought alternative markets in India and South East Asia and has managed to come through the Chinese blacklisting looking stronger than ever.
However, it remains to be seen how vulnerable iron ore will be, given that China is its major market and the middle kingdom can influence pricing in direct and circuitous ways.
Recent geopolitical events and a meeting of foreign ministers of the "Quad" - US, Japan, India and Australia - scheduled to take place in Melbourne this week just happens to coincide with a directive from the Chinese government that has already punctured iron ore's recent price spurt.
The Chinese Price Supervision and Competition Bureau of the State Administration of Market Supervision and the Price Department of the National Development and Reform Commission issued a statement and the iron ore price dropped almost 3% to about US$144 per tonne.
"The State Administration for Market Regulation and the National Development and Reform Commission pay close attention to changes in iron ore prices, and will further study and take effective measures to ensure the stable operation of iron ore market prices; at the same time, strengthen market supervision; and deal with illegal activities such as fabrication and dissemination of price increase information and price gouging, beat him when he shows his head, and punish him severely," it stated.
Australia supplies more than 50% of world's iron ore followed by Brazil, with about 20%.
China still remains dependent on Australian iron ore as Brazil deals with internal COIVD-19 issues, the wash-up of the Samarco dam disaster, and the logistical challenge of exporting from further away from China's ports.
China has made no secret of its interests in developing iron ore resources in Africa, despite the significant infrastructure challenges this would face.
In the medium term, China's love affair with the Pilbara's high grade iron ore will almost certainly fade.
Meanwhile, Australia's Resources and Energy Quarterly of December 2021 stated metallurgical coal prices in China have surged, due to a combination of strong domestic steel demand, constrained global supply, and informal import restrictions against Australian supply.
"This has led to domestic coking coal prices reaching new highs in October, when premium coal topped US$600 a tonne," it said.
There are even signs China may be forced to allow more Australian coal shipments to trickle in with reports of 778,000 tonnes of Australian coking coal and 2Mt of thermal coal imported in October.
According to the Australian Bureau of Statistics' International Trade in Goods and Services data, coal was again a major contributor with exports totaling $23.8 billion in the three months to December - a massive 156% higher than for the same period to December 2020.
On the other hand, iron ore exports earnings eased to $24.9 billion in the three months to December, down 29% on the previous period as prices came down from record levels.
Hogsback reckons we may see this trend continue in the future and watch coal emerge as our nation's major valuable export.
