China Energy Investment Corp has placed an order to import Australian coal, three sources familiar with the matter said on Friday, 6 Jan, in one of the first deals since Beijing eased an unofficial ban imposed on coal imports from Australia in 2020.
The move comes as relations between Beijing and Canberra are thawing, and as China is trying to meet growing demand for coal because of higher power consumption following the easing of coronavirus-related restrictions.
Australia was China’s second-largest coal supplier before the unofficial ban, which came into force as diplomatic ties broke down in 2020.
Coal cargoes shipped from Australia to China, which had accounted for nearly a quarter of all Australian coal supplies in 2019, fell to nearly zero in 2021 and 2022.
Global prices of both coking and thermal coal shot up after Russia’s invasion of Ukraine last year. Major buyers such as China and India responded by boosting coal purchases from Russia, which offered steep discounts.
Analysts and traders expect the return of Australian coal to challenge the market share of suppliers such as Russia and add to pressure on prices in the longer term.
Entry of Australian coal into Chinese markets could ease coking coal prices, which are currently on the higher side,” an Indian coal trader said.