Australia’s coal imports to China increased in 2023 following the lifting of a nearly two-year ban, but they stayed below pre-ban levels as the supplier attempts to reclaim market share from less expensive rivals Mongolia and Russia.
According to customs data released on Saturday, China imported 52.47 million metric tonnes of Australian coal in 2023, up from 2.86 million tonnes in 2022. In 2020, China imported 77.51 million tonnes of coal from Australia, the final full year prior to the ban.
China eased restrictions in January 2023, marking the start of a string of advances after Prime Minister Anthony Albanese’s election. Beijing also consented to review duties on Australian wine and remove tariffs on barley this past year.
According to the data, Australia shipped 6.71 million tonnes of coal in December, an increase of 6.4% over November’s 6.31 million tonnes.
Separate data released last week revealed that China’s total coal imports reached a record high of 474.42 million tonnes in the year, up 61.8% from 2022, thanks to the recovery in Australian imports.
According to the data, December’s imports reached a record-breaking 47.3 million tonnes as buyers scurried to import coal before Beijing reimposed some import duties this month.
China’s largest supplier is still Indonesia, which sells the majority of its coal to China under yearly supply agreements. In 2023, it exported 220.25 million tonnes to China, a 29% increase over 2022.
Mongolia and Russia Challenge Australia’s Coal Market Share
According to customs data, imports from Mongolia—mainly coking coal—more than doubled in 2023 compared to the previous year, totaling 69.97 million tonnes.
Arrivals of Russian coal increased by 50% in 2023 to 102.13 million tonnes. China’s coal imports from Russia increased in 2022 as a result of trade embargoes between the West and Moscow, which gave China the opportunity to purchase coal at a lower cost.
However, since October of last year, a new export tax on coal and other commodities has reduced the appeal of Russian imports.
Starting this month, importers of coal from Russia and Mongolia will have to pay a most-favorable nation tariff rate ranging from 3% to 6%. Whereas coal from Australia and Indonesia will be exempt due to free trade agreements.
Outlook for 2024: Tariffs and Market Predictions
Analysts do not anticipate that China’s imports will be substantially impacted by the import tariffs in 2024, though.
90% of China’s import volumes of coking coal in 2023 are expected to be subject to import tariffs, according to a research note from Macquarie analysts. But “Russian or Mongolian producers are likely to absorb the additional prices”.