By Bloomberg News
(Bloomberg) –Australian coal continues to make inroads among Chinese buyers, adding to pressure on domestic prices, with new shipments climbing to their highest level since Beijing halted imports in the fall of 2020.
That ban ended at the start of this year and China’s appetite for the high-quality coal supplied by Australia is gaining momentum amid concerns that rising domestic production includes too much lower-grade fuel. Australian cargoes in April of mostly thermal coal for power plants surged 75% from the prior month to 3.89 million tons, according to Chinese customs data.
That puts Australia’s share of imports at 10%, almost double the level seen in March. Although a bigger volume of Australian coal was recorded in November 2021, those were previous shipments stranded by the ban that took as long as a year to clear customs.
At the same time, Russia’s coal exports to China dropped from the record level hit in March, as did its crude oil shipments. Seaborne Russian gas cargoes also fell from the previous month. The moderation in sales comes as Russian leaders visit Shanghai on Tuesday to help cement Moscow’s importance as a supplier of commodities to its eastern neighbor and strategic partner.
China’s total coal purchases fell slightly in April to 40.68 million tons, although that was still their third-highest tally ever and shipments have increased 89% over the year to date. The benchmark price at the port of Qinhuangdao has dropped to its lowest since the start of last year as the rising tide of imports lands at a time of seasonally weak demand.
© 2023 Bloomberg L.P.
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