Has China banned Australian coal? There may be another step in the pressure that China is exerting onto Australia.

According to the Australian Financial Review, some power plants in China have been told to stop importing Australian coal. If that’s the case then perhaps China has indeed banned Australian coal. 

It may be as simple as China wanting to support its own coal industry. But it comes at a time when China has already hit Australian barley. Australian beef and perhaps even Australian iron ore could be in the firing line. Basically, most of Australia’s main commodity exports to China is looking like it’s under pressure from the Asian superpower.

What will the share prices of Australian coal miners drop?

We’ll see this morning. There are several large coal miners on the ASX including BHP Group Ltd (ASX: BHP), Whitehaven Coal Ltd (ASX: WHC), Yancoal Australia Ltd (ASX: YAL) and New Hope Corporation Limited (ASX: NHC).

Some coal miners sell more coal to China than others, so it doesn’t affect them all the same. For example, a lot of Whitehaven’s customers are based in Japan. Places like Taiwan and India are also customers of Australian coal. Indeed many Asian countries buy Australian coal. 

It’s concerning to see that China is pressuring Australia over the coronavirus inquiry, particularly if China has entirely banned Australian coal. But in terms of what effect this might have on ASX coal miners, it’s not as much as what a ban on iron ore would do.

Coal miners are certainly priced cheaply at the moment. The coal price isn’t as high as it once was and coal usage in most countries is expected to fall over the next couple of decades.

I’m not looking to buy shares of coal miners, but brave investors who don’t mind owning coal shares may be able to make a decent return if coal prices rise.

More reading

• ASX 200 drops 0.4%, Chinese threat to Australian iron
• Is China about to blow up the dividends of BHP, Rio and Fortescue?
• Why ASX 200 iron ore miners are your best bet for dividends right now
• Here’s why the Fortescue share price hit an all-time high today
• Macquarie picks the best stocks to buy for the post COVID-19 rebound

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Corporation Ltd (ASX: TLS) share price could be in the buy zone right now. The Aussie telco’s shares have slumped 13.93% lower in 2020 while the S&P/ASX 200 Index (ASX: XJO) is down 17.57% at 5,550.40 points.

That means that Telstra has actually outperformed this year, so, what’s the big deal? These numbers don’t tell the full story.

What’s been happening to the Telstra share price?

The ASX 200 fell to 4,546.00 points on 23 March at the bottom of the bear market. The index has since recovered 22.09% in the months since, but the Telstra share price hasn’t had the same performance.

Telstra shares fell to $3.09 on 23 March after climbing as high as $3.90 in mid-February. But Telstra has since been left behind in the share market rally that followed the crash, and is currently trading back where it was on 23 March. So, has Telstra lost its blue-chip status or is there something else going on?

The only major announcement from Telstra since 23 March was its Foxtel impairment news. Telstra announced a $300 million impairment charge against its 35% stake in Foxtel. The move wrote down the value of Telstra’s stake in the business from $750 million to $450 million.

However, the Telstra share price didn’t fall sharply after the 8 May announcement. That makes me wonder if there’s a secret buying opportunity in the Aussie telco today.

Telstra has a market capitalisation of $36.75 billion right now with a 3.24% dividend yield. The company does have a history of dividend cuts, which makes me wary of investing based on potential income.

So, what’s the good news for the telco?

I think there are plenty of short-term headwinds for the Telstra share price. However, a shift towards more working from home should increase demand for mobile infrastructure in Australia.

Telstra is arguably leading the 5G network race and is well-placed to take on the NBN in coming years. That could mean earnings stabilise and dividends pick back up in the medium to long-term.

More reading

• Are ASX 200 REIT shares a dividend trap?
• 5 things to watch on the ASX 200 on Friday
• The “most profitable” ASX airline stock you probably never heard of
• ASX retail stocks facing new billion-dollar earnings scare during COVID-19 recovery
• 2 ASX 200 dividend shares to buy for income in 2021

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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