China’s imports of Australian coal rose significantly in April, reaching their highest level since July 2020, as trade relations between the two countries continued to improve and domestic coal prices in China started to pick up.
According to data from China’s General Administration of Customs, China imported 7.19 million metric tons of Australian coal last month, a 25% increase from the same period in 2019, before the years-long unofficial ban on Australian coal imports.
The recovery in Australian coal exports to China has been ongoing since February 2023, when China ended the ban that was in place since 2020. Analysts attribute this to the improving trade relations between the two countries, as well as the favorable price and quality of Australian coal compared to material from top supplier Indonesia.
Furthermore, the free trade agreement between Australia and China has allowed Australian coal to enter the Chinese market tariff-free, while China has reinstated a 3-6% import tariff on coal from countries without such an agreement, including Russia and Mongolia.
Alongside the increase in Australian coal imports, China also saw a rise in imports from Russia and Mongolia last month, as the country worked to make up for domestic production cuts. Russian coal imports ticked up 5% year-on-year to 8.49 million tons, with the increase mostly coming from coking coal imports, which rose by 18%.
China’s total coal imports increased by 11% in April to 45.25 million tons, as domestic production failed to meet demand. Safety inspections in the main coking coal producing hub of Shanxi have curbed production, with output dipping by 18.9% in the first quarter.
The surge in Australian coal imports reflects the thawing of trade relations between China and Australia, as well as China’s efforts to diversify its coal supply sources amid domestic production challenges. This trend could have implications for global coal trade flows and prices.