China’s newfound appetite for Australian coal opens up new trade opportunities.

Top importer China is resuming coal imports from Australia after a three-year hiatus, which could change trade routes and volumes of the fuel used in power and steelmaking.

Here’s a look at how trade flows have changed since 2020, when China imposed an unofficial import ban on imports from Australia, the world’s second-largest coal exporter, in response to a diplomatic backlash. 


Australia was China’s second-largest supplier of foreign coal before the ban, accounting for a third of China’s imports.
Coal shipments from Australia to China, which accounted for about a quarter of Australia’s total fuel exports in 2019, fell to almost zero in 2021 and 2022.Since then, Japan has established itself as Australia’s largest customer, while India and Europe have grown. purchases, showed data from the consulting firm Kpler.

Australia’s shipments to Japan rose to 36.5 percent of its total coal exports in 2022, up from 27.6 percent in 2019. India’s share rose from 12.3 percent to 15.7 percent in 2022, while Europe’s share rose from4.6 percent to 8 percent, Kpler’s data show. 

The data showed Other Asian countries, including South Korea, Malaysia, Taiwan, and Vietnam, increased their imports of Australian coal from 2019 levels.
“Australian producers have worked hard to create new markets for their coal; they won’t ignore the new business relationships they’ve developed when they decide where to sell their coal in the future,” said Patrick Markey, head of consulting firm Sierra Vista Resources.


To make up for Australia’s coal shortage, which accounted for more than a third of China’s foreign coal, China bought more from Indonesia, the world’s largest coal exporter.
Indonesia’s share of Chinese imports rose to 68% in 2022 from 51.8% in 2019, despite strong discounts from Russia.



Russian invasion of Ukraine

The global coal trade, reoriented after China’s ban on Australian coal, changed further after Russia invaded Ukraine. The prices of heating and coking coal rose after the attack.
In response, big buyers like China and India bought more coal from Russia, offering deep discounts, even as sellers like Australia, Indonesia, and South Africa tried to sell at higher prices to European buyers and Japan.

Russia’s share of China’s coal market rose significantly to 16.2 percent in 2021, up from 7.1 percent in 2019, following Australia’s ban.
As Europe avoided Russian coal after the occupation of Ukraine, Russian coal imports from China continued to grow, reaching 56.3 million tons in 2022, or 22% of total imports. Shipments to India fell to 5.2 million tons in 2022 from 72.1 million tons in 2021 as it increased shipments to Europe and Japan. 
India, the world’s second-largest importer of coal, increased its share in the purchase of Russian coal along with China.
Russia has overtaken the United States to become India’s fourth-largest coal supplier, lifting exports to 19.62 million metric tons in 2022, nearly three times the 2021 level of 7.66 million metric tons, data from consultancy Coalmint showed.

In the US, which increased sales to China about sixfold in 2021, saw its share of the Chinese market drop to less than 1 percent in 2022 from
percent in 2021 as it prioritized supplies to Europe after the Ukraine invasion. Kpler’s data showed.

South African shipments to China fell to 1.16 million metric tons from 7.85 million metric tons as European buyers offered higher prices.

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