China’s imports of Australian coal rise to nearly 4-year high in April

CHINA’S coal imports from Australia rose in April to their highest since July 2020, Reuters records and customs data showed on Monday (May 20), because of improving trade relations and better price and quality.

The country imported 7.19 million tonnes of Australian coal last month, according to data from the General Administration of Customs. That represents a 25 per cent increase from the same month of 2019, before a years-long unofficial ban on Australian coal imports.

Australian coal exports to China have been recovering since February 2023, when China ended the ban in place since 2020, after trade relations improved between the two countries.

Further, domestic coal prices in China started to pick up in April after months in the doldrums, said analysts at Galaxy Futures.

With domestic supply tightening, coastal power plants and steel mills took advantage of the improving import arbitrage to buy Australian coal, whose quality is generally higher than material from top supplier Indonesia, they said.

Australian exporters have also benefited from a free trade agreement that allows Australian coal to enter China tariff-free.

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China reinstated a 3 to 6 per cent import tariff at the beginning of the year on countries without an agreement, applying to Russian and Mongolian coal imports.

The country also increased coal imports from sanction-hit Russia and neighbouring Mongolia last month, the data showed, to make up for domestic production cuts.

Russian coal imports ticked up 5 per cent year on year to 8.49 million tonnes, despite sanctions affecting major Russian coal traders. The increase came mostly from coking coal imports, which rose by 18 per cent.

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China’s total coal imports increased 11 per cent in April to 45.25 million tonnes as domestic production failed to meet demand.

Safety inspections have curbed production in the main coking coal producing hub of Shanxi, where output dipped by 18.9 per cent in the first quarter of the year.

Imports from Mongolia, mostly coking coal, also helped fill the gap, rising by 33 per cent last month to 7.2 million tonnes.

Indonesia, China’s largest coal supplier, shipped 17.82 million tonnes in April, down 15 per cent from a year earlier. REUTERS