China’s Australian coal imports surge as trade picks up after easing of ban, amid thawing of ties

China’s March coking coal purchase from Australia quadrupled from the previous month, while thermal coal imports spiked by 14 times
Beijing reportedly lifted its verbal ban on Australian coal imports in January amid an easing of tensions, that has also spread to lobsters, wine, logs, cotton and barley

China-Australia relations

Kandy Wongin Hong KongandJi Siqiin Beijing

Published: 4:00am, 22 Apr 2023

Why you can trust SCMP

China increased purchases of Australian coal sharply in March amid thawing ties as imports rose further following Beijing’s move to lift its unofficial trade barrier earlier this year.

It imported 284,989.5 tonnes of coking coal and 1.93 million tonnes of thermal coal from Australia in March, according to data from the General Administration of Customs released on Friday.

This represented an increase from imports of 72,982 tonnes of coking coal and 134,254 tonnes of thermal coal in February.

In terms of value, China imported US$92 million of coking coal, up from US$23.7 million in February, while thermal coal shipments rose from US$18.2 million in February to US$256 million last month.

In March 2020 – before China’s unofficial ban on Australian coal – imports of coking coal had reached 4.36 million tonnes, while 5.65 million tonnes of thermal coal entered the Chinese market, according to official data.

Information from Shanxi-based coal information provider sxcoal.com showed that imports will be higher in April, with shipments having already risen above 3 megatonnes compared to 2.77 megatonnes in March.

“Considering the time used for customs clearance, the difference with Chinese customs data seems justified, though [it] could vary to some extent,” said sxcoal.com chief editor Harry Huo.

China’s state planner, the National Development and Reform Commission, was reported to have held talks with four state-owned importers in January over a partial lifting of the verbal ban on Australian thermal and coking coal that had been in place since 2020.

High-quality Australian coal is highly desired by China’s steelmakers and power plants

Giulia Interesse

“High-quality Australian coal is highly desired by China’s steelmakers and power plants,” said Giulia Interesse, an editorial associate at consulting firm Dezan Shira and Associates in a blog post last month.

“China was a significant consumer of Australian coal until a non-official ban was imposed due to heightened political tensions between the two countries.”

China and Australia’s bilateral relationship soured in 2020 after the previous Morrison administration angered Beijing by calling for an international probe into the origins of Covid-19.

Beijing responded by imposing a raft of unofficial and official bans on Australian wine, barley, lobsters, cotton, logs and coal.

01:26

China, Australia reach deal to resolve barley tariff dispute as Canberra suspends WTO case

The unofficial ban of Australian coal led to Beijing diversifying its sources of imports from Mongolia, Russia and Indonesia, according to Interesse.

A thawing of ties started last year, with coal the first in a range of Australian products – lobsters, wine, logs, cotton and barley – that has been allowed to return to China without an official announcement by Beijing.

Business delegates from Australia and China held their first in-person strategic dialogue in Beijing since 2018 on Wednesday, with discussions covering a range of sectors, including mining and resources.

Australian Prime Minister Anthony Albanese and trade minister Don Farrell are also expected to meet with their Chinese counterparts in Beijing later this year.