China becomes Australia's top coal market

Shipments of coal to Japan from Australia were 6.10 million t in April, down from 7.93 million t in March and at the lowest since the 5.97 million t recorded in April 2017. Australia's coal exports to China have been in recovery since February 2023 when China ended its informal ban on imports. This was good news for Australia, which is the world's biggest shipper of metallurgical coal used to make steel, and the second-biggest exporter of thermal coal, used mainly to generate electricity.

The curb on imports was put in place in mid-2020 amid tensions between Beijing, China and Canberra, Australia over the latter's call for an international investigation into the origins of the COVID-19 pandemic, which began in the Chinese city of Wuhan. The ban was not official but it still resulted in shipments essentially dropping to zero.

In 2019, Australia's exports to China averaged 7.84 million t a month, and in 2018 it was 7.37 million t, according to Kpler data. Exports to China hit a record high of 12.03 million t in June 2020, just before the ban was imposed. While Australia's exports to China have recovered somewhat, the trend for shipments to Japan show a gentle decline due to nuclear reactor restarts and lower LNG prices after the spike caused by Russia's invasion of Ukraine ended.

For the first four months of 2024, Australia's exports of all grades of coal to Japan have averaged 8.07 million t, down from an average of 8.79 million t in 2023, and 10.54 million t in 2022, thereby being surpassed by exports to China.

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