China’s coal imports likely to increase in 2023 to stabilize prices

A view of the coal yard at the Rizhao Port, East China’s Shandong Province on August 18, 2022. Red reclaimers are rumbling, with trains full of goods ready to be exported. In July, China exported 230,000 tons of coal and lignite, a year-on-year increase of 171.6 percent, customs data showed. Photo: VCG

Coal industry in China and abroad expect stronger trade in the fuel, a reliable source of power for reviving economy, as China aims to ramp up energy supplies and stabilize prices.

With the lifting of pandemic restrictions, border reopening and business resumption, China is gearing up to recover rapidly from pandemic, which will offer more opportunities to fuel producers such as Indonesia, Mongolia and Russia, all leading coal exporters.

Meanwhile, Australian coal miners may see a pick-up in exports to China, according to the China Import-coal Summit in Beijing on Thursday.

Wang Deyang, deputy director of the Trade Development Bureau of the Ministry of Commerce, said that the government will give full play to the comprehensive comparative advantages of coal to stabilize energy prices.

Coal accounted for 56 percent of China’s total primary energy consumption. Imported coal accounts for less than 10 percent of the country’s total consumption, but it’s an increasingly important supplement.

Andre Gorobez, head of the Economic Division of the Trade Representative Office of Russia, said on Thursday that coal trade is a pillar of strong bilateral trade relations.

Official figures haven’t yet been released, but there’s good reason to believe that China’s imports of Russian coal grew in 2022, he said. Now, with the lifting of epidemic restrictions, and the opening of new cross-border bridges, transport capacity will constantly grow, Gorobez said.

China’s imported coal market is at a turning point. With the economic recovery in 2023, China’s coal consumption will rise.

China’s imported coal mainly comes from Indonesia, accounting for 58.3 percent of total imports, followed by Russia at 23.3 percent and Mongolia at 10 percent, data from industry information provider Lange showed.

Speaking at the summit, Hendra Sinadi, secretary general of the Indonesian Association of Mineral Entrepreneurs, said via video link that China will remain the largest export market for Indonesian coal in 2023.

The Indonesian government supports the development of the coal industry and encourages the development of coal deep-processing, in which technology and investment from China will play a vital role, Sinadi said.

Australian coal, which had basically disappeared from the Chinese market in the past years, is coming back on the market. Chinese steel companies have recently started resuming coal imports from Australia as part of efforts to diversify their sources of supplies and stabilize prices.

Relevant government departments held a meeting to discuss Australian coal issue, and four companies can import Australian coal point-to-point, Chinese steel information provider mysteel.com reported on Thursday. 

Import of Australian coal is expected to show a big increase in the second half of 2023, Xiong Chao, an industry analyst, said on Thursday.

Sinadi remains confident in the leading role of Indonesian coal in China, despite potentially growing competition from exporters in Australia.

“Indonesian coal has characteristics that match Chinese demand, and our coal has a cost advantage over Australian coal,” Sinadi said, adding that Indonesian authorities will not ban coal exports this year.