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RPT-FACTBOX-Coal trade and China's easing of Australian supply halt

(Repeats story from Jan. 6 without changes to text)

SINGAPORE, Jan 6 (Reuters) - Top importer China is resuming coal imports from Australia after a three-year halt, a step that could alter trade routes and volumes for the fuel used in power generation and steel production.

Here’s a look at how trade flows have changed since 2020 when China imposed an unofficial ban - which was never officially declared - on imports from Australia, the world’s second-largest coal exporter, following a diplomatic setback.

AUSTRALIA

Australia was China’s second-largest supplier of overseas coal before the ban, accounting for a third of China’s imports.

Coal shipments from Australia to China, which had accounted for about a quarter of Australia’s total exports of the fuel in 2019, fell to nearly zero in 2021 and 2022.

Since then, Japan has consolidated its position as Australia’s biggest client, while India and Europe have increased purchases, data from consultancy Kpler showed.

Australia’s supply to Japan increased to 36.5% of all its coal exports in 2022, compared with 27.6% in 2019. India’s share increased to 15.7% in 2022 from 12.3%, while Europe’s share increased to 8% from 4.6%, the Kpler data showed.

Other Asian countries including South Korea, Malaysia, Taiwan and Vietnam also increased Australian coal imports compared with 2019 levels, the data showed.

“The Australian producers have worked hard to build new markets for their coals; therefore, they won’t overlook these new commercial relationships they’ve developed when determining where they will sell their coals in the future,” said Patrick Markey, managing director of consultancy Sierra Vista Resources.

CHINA

To make up for the absence of Australian coal, which accounted for over a third of China’s overseas coal supplies, China bought more from Indonesia, the world’s largest coal exporter.

Indonesia’s share in Chinese imports rose to 68% in 2022, from 51.8% in 2019, despite Russia offering steep discounts.

RUSSIA’S INVASION OF UKRAINE

Global coal trade, which had been re-routed following China’s ban on Australian coal, was further altered after Russia’s invasion of Ukraine. Prices of thermal and coking coal shot up after the invasion.

In response, major buyers such as China and India bought more coal from Russia, which offered steep discounts, even as sellers, such as Australia, Indonesia and South Africa, sought to sell to European buyers and Japan at higher prices.

Russia’s share in the Chinese coal market increased significantly after the Australian ban to 16.2% in 2021, from 7.1% in 2019.

As Europe shunned Russian coal after the invasion of Ukraine, Chinese imports of Russian coal further rose to 56.3 million tonnes, or 22% of overall imports in 2022.

Although Australia’s coal trade patterns changed less than China’s after the invasion, Australian supplies to India fell to 54.2 million tonnes in 2022, from 72.1 million tonnes in 2021, as it increased supplies to Europe and Japan.

China was joined by India, the world’s second largest coal importer, in increasing its share of Russian coal purchases.

Russia surpassed the United States to become the fourth largest supplier of coal to India, increasing exports to 19.62 million tonnes in 2022, nearly trebling from 2021 levels of 7.66 million tonnes in 2021, data from consultancy Coalmint showed.

The United States, which increased sales to China about six-fold in 2021, saw its share of the Chinese market fall to less than 1% in 2022 from 4% in 2021, as it prioritised supplies to Europe after the invasion of Ukraine.

South African supplies to China declined from 7.85 million tonnes to 1.16 million tonnes, as European buyers quoted higher prices, the Kpler data showed.

Reporting by Sudarshan Varadhan in SINGAPORE; Editing by Florence Tan and Barbara Lewis

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