China’s coal imports from Australia dropped in September from a two-year peak in August, as tepid demand and weak domestic prices discouraged utilities from seeking additional supplies from overseas.
Arrivals from Australia totalled 4.9 million metric tons last month, down from 6.69 million tons in August, which was the highest level since July 2020, data from the General Administration of Customs showed on Friday.
Chinese traders and downstream users have been increasing coal purchases from Australia since Beijing removed a nearly two-year-long ban on coal trade with Australia in January, because of Australian coal’s high quality and relatively lower prices compared to domestic coal.
But as domestic Chinese coal prices slumped in August, due to abundant supply and sluggish demand for coal-fired power, utilities cut back orders for September-arrival cargoes.
China’s overall coal imports fell to 42.14 million tons in September from a record of 44.3 million tons in the prior month, customs data last week showed.
But more Australian coal is expected to reach China in October, because domestic coal prices have since rebounded and utilities have started to build up their inventories ahead of the winter heating season, according to traders.
Prices for thermal coal with energy content at 5,500 kilocalories (kcal) rose to about $140 a ton in northern Chinese ports this week, compared to about $120 a ton for the same quality imported coal in southern China, according to market sources.
For other origins, Russian coal arrivals were 9.24 million metric tons, down from August’s 9.97 million tons, with limits on rail capacity squeezing Russia’s exports, said a China-based trader.
Russian coal exports to China may continue to decline in future, after Moscow imposed export duties on coal and other goods that went into effect on Oct. 1.
China is the largest buyer of Russian coal, purchasing 45% of its exports in September, according to analysis by the Centre for Research on Energy and Clean Air.
Imports from Indonesia slipped to 18.06 million tons, down from August’s four-month high of 18.7 million tons.
Arrivals from Mongolia, largely of coking coal, fell to 6.71 million tons, down from August’s record 7.16 million tons.
China’s total imports during January to September are already up 73.1% compared to the same period of 2022 at 347.65 million tons.
Source: Reuters (Reporting by Colleen Howe and Muyu Xu; Editing by Christopher Cushing)
