In the first six months of this year, China imported a total of 139.56 million tons of coal, down 19.7 percent year-on-year. In June 2021 alone, imports have increased, with the highest 28.4 million tons so far in 2021, up 35% from May and 12.3% compared to June last year.

One of the factors that contributed to the drop in coal imports from last year was Beijing’s unofficial ban on coal purchases from Australia, the world’s second-largest thermal coal carrier.
According to commodity analysts Kpler, China imports from Australia, which used to be the second largest supplier. The unofficial ban was introduced around the middle of last year, and China’s imports from Australia dropped from 9.65 million tonnes in June 2020 to just 435,559 tonnes in June this year, according to Kpler.
China has imported more coal from Indonesia, the largest exporter of thermal coal, as well as from Russia, the US and even South Africa, which is not a traditional carrier to China.
China’s imports from Indonesia increased from 11.77 million tons in June 2020 to 18.28 million tons in June 2021, according to Kpler.
Imports from Russia rose to 5.33 million tons in June this year from 3.78 million tons in the same month last year, while imports from the US were 1.56 million tons in June, up from 572,000 tons in the same month of 2020. .
However, China is paying dearly to reduce Australian coal imports, with Indonesian coal prices soaring.
Indonesian coal with a calorific value of 4,200 kilocalories/kg (kcal/kg) as assessed by commodity price reporting agency Argus, hit a record high of $67.90/ton in the week to July 23. This coal is up 200% from its 2020 low of $22.63 a tonne in September.
Coal prices in Asia also rose amid strong demand from buyers from Japan, South Korea and Taiwan.
However, they prefer premium Australian coal, such as Newcastle coal 6,000 kcal/kg, which rose to $151.20/mt in the week to 23 July, up 226% from the 2020 low on September.

However, the main thermal coal that China uses to buy from Australia, with an energy value of 5,500 kcal/kg rose to $92.55/mt in the week to July 23, up 164% year-on-year. 2020.
Australia’s 5,500 kcal/kg coal exporters have largely been successful in moving importers from China to India, but are likely to have had to accept lower prices.

Source: VITIC/Reuters

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