Recently, Australian Labor Party failed Australian election, leaving the success to existing government. The move means the worsening China-Australia relationship may remain unclear.

Chinese Coal Import Sources

The sources of China’s coal imports are mainly from Indonesia and Australia, followed by Inner Mongolia and Russia which in fact is unfavorable in shipping cost to China due to expensive rail transportation. In comparison, southeastern regions in China are having advantage in buying Australian and Indonesian coal. It is introduced that most of Indonesia’s thermal coal is lignite coal, with low caloric value.

The top three suppliers of China’s coal imports are Indonesia, Australia and Russia, among which Indonesia’s coal takes over 50 percent of the share.

Imports from Australia Shrink

China’s coal import dived sharply from 2015 when central government strived to get Chinese coal industry rid of poor situation. Then in 2016, Chinese government called for Supply-Side Reform which resulted into supply shortage from domestic coalminers. Therefore the imports volume started to climb up and even in 2018 hit record high of recent four years.

From 2017, Chinese government conducted the restriction for coal imports by stricter coal quality inspection for inbound shipments. Thereafter, the clearing of Australian coal was prolonged.

It is introduced that coal import from Australia kept falling as the proportion in total import from 2018. Customs of China released that China’s coal import in the first three months totaled 74.623 million tons, down 1.8 percent on year. Among which, coal import from Australia was 18.3347 million tons, down 11.32 percent on year.

In response to “China Strictly Inspects Coal Import from Australia”, spokesman of Ministry of Foreign Affairs of China in March 2019 introduced that China finds many unqualified cases after the conduct of risk supervision and analysis on imported coal, and our stricter quality inspection and environmental protection regulation for imported coal is aimed at better protecting Chinese importers, the legal right for Chinese users and ecological environmental safety of China.

It is known that the clearing of Australian coal at Chinese ports have been prolonged. For instance, the clearing at eastern ports takes around 60 days, and that at Guangzhou port, South China, takes 40+ days. No Australia-originated coal is uploaded via northeastern ports yet.

With the continuous governance of Australian existing government, the China-Australia relationship will draw great attention, but the uncertainties will remain, which will generate inactive trading of Chinese importers.