Factbox: China Eases up on Its Halt on Australian Coal Supplies

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China, the world’s top coal importer, has resumed coal imports from Australia after a three-year halt, a significant development that could have far-reaching implications for the global coal trade.

The resumption of coal imports from Australia to China is a significant step forward for the global coal trade. The two countries had been locked in a long-standing dispute over the import of Australian coal, which had caused shipments to plummet in 2021 and 2022.

China Coal Import Restrictions

This has significantly impacted the global market, as China is one of the top consumers of thermal coal, and its demand for imports has dropped drastically.

Patrick Markey, managing director of consultancy Sierra Vista Resources, said, “The Australian producers have worked hard to build new markets for their coals; therefore, they won’t overlook these new commercial relationships they’ve developed when determining where they will sell their coals in the future.”

At the same time, however, increased demand from other countries, such as Japan, has helped bolster Australia’s exports. Australia’s supply to Japan rose to 36.5% of all its coal exports in 2022, compared with 27.6% in 2019. This marks an almost ten per cent increase in just three years and indicates growing demand for Australian coal in other markets and China’s easing import restrictions.

While China has resumed importing Australian coal, other Asian countries are also increasing their demand for the commodity. South Korea, Malaysia, Taiwan and Vietnam have all seen an increase in imports of Australian coal.

The easing of restrictions by China regarding imports of Australian coal has significantly impacted global trade flows in terms of quantity and price. According to industry experts, this is likely to result in higher prices for both thermal and coking coal, which can be beneficial for countries like Australia, which export both types globally as they will be able to command higher prices on their exports.

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