China has seen its market share of seaborne coal imports fall sharply over the past two years, down from 93% between 2015-2022 to 76% in 2023-2024, amid a shift towards land-borne alternatives, according to maritime commerce platform provider Veson Nautical.

A report produced using Veson’s commodity market intelligence solution Oceanbolt shows that China’s seaborne imports only increased by 45% in 2023. Meanwhile, its coal exports soared 62% to 473.4 million tonnes for the year.

The data, the report states, represents “a seismic shift in global trade flows” as China looks to diversify supply away from traditional exporters and capitalize on geopolitical uncertainty by purchasing discounted coal from other sources.

Australia trade declines

The report also states that Australia’s share of China’s coal imports fell sharply, from 26% in 2019 to just 11% in 2023, after the unofficial ban on Australian coal imports was lifted. Since all Australian coal exports to China are seaborne, this decline largely explains the recent drop in seaborne coal volumes.

“The country that has been impacted the most in this shift to higher land borne volumes is Australia,” Mikkel Nordberg, senior maritime analyst at Veson Nautical, says. “And while there has been a recovery in imports of Australian steam coal to China after trade resumed in 2023, the coking coal trade has been heavily impacted.”

Nordberg adds that China imported just 2.8 million tonnes of Australian coking coal, a staggering 91% decline from pre-ban levels.

More Russian coal

The report cites Russia as a growing supplier of coal to China. Russia’s share of Chinese coal imports grew from 11% in 2019 to 22% in 2023. This shift could be linked with the war in Ukraine and the subsequent sanctions imposed on Russia by Western nations, it adds.

“With reduced global demand and limited buyers, China has capitalized on the opportunity to purchase Russian coal at discounted prices,” Nordberg explains. “As a result, the Russia-China coal trade surged, increasing by 20% in 2022 and a further 50% in 2023, reaching 102 million tonnes.”

Nordberg adds that between 2022-2023, Russian coal exports to China grew by 34 million tonnes, but only 18.7 million tonnes of this increase were transported by sea, suggesting that 15.3 million tonnes were shipped via land.

Mongolia wins big

The report also cites Mongolia as a big winner as coal exports to China soar as infrastructure improves.

Around 90% of Mongolia’s coal production is destined for export to China due to limited domestic demand. According to the Mongolian Coal Association, the country has the potential to produce up to 100 million tonnes annually.

However, this capacity is constrained by border infrastructure and customs processes. In 2023, Mongolia took significant steps to enhance its coal export capabilities, including the inauguration of a new railway line connecting its coal mines to the Chinese border.

Consequently, Mongolia’s coal exports to China surged by 125% in 2023, reaching 70 million tonnes, and have grown another 27% so far in 2024. Approximately 75% of these exports are coking coal, making Mongolia China’s largest supplier of this resource, the report states.

“In 2023, Mongolia accounted for 53% of China’s total coking coal imports,” Nordberg says. “As a landlocked country, all of Mongolia’s coal exports are transported overland, which means that it is effectively replacing the seaborne coking coal volumes previously sourced from Australia.”

Source: MINING.COM – Read More