MK socks East China’s Shandong Province carries out orderly loading operations on March 16, 2024. This is an important trading port for Southeast Asian countries. Photo: VCG" />

A coal terminal in Rizhao Port, East China’s Shandong Province carries out orderly loading operations on March 16, 2024. This is an important trading port for Southeast Asian countries. Photo: VCG

China's coal imports witnessed a notable year-on-year increase of 12.5 percent in the first half of the year, with a significant rise in shipments from Australia. Experts attribute the growth to improving China-Australia relations, and called for stable bilateral relations to ensure a continued recovery.

China's total imports of coal reached 250 million tons in the first half of 2024, marking a new high for the period, with Australian coal accounting for a substantial portion of overall growth, according to data released by the China Coal Transport and Distribution Association on Tuesday.

Ship-tracking data from BigMint revealed a dramatic escalation in exports of coking coal from Australia to China, jumping from 2.16 million tons in the first half of 2023 to 6.56 million tons in the same period this year. Additionally, thermal coal exports to China also grew by 41.5 percent to reach 29.91 million tons this year.

Industry experts attribute the rise primarily to the improved bilateral relations between China and Australia. The stability of these relations is crucial for the sustained recovery of trade between the two countries, they noted.

Coking coal is an important resource in both the petrochemical and steelmaking industries, and Australia has long been an important source of Chinese coking coal imports. But in the past few years, affected by worsening bilateral relationship, Chinese companies have preferred to replace coking coal imports from other countries, a metal industry expert surnamed Zhang told the Global Times on Tuesday.

Chinese coking coal imports from Australia have only seen a rise this year as a result of improved relations between the two countries, Zhang added.

Zhou Mi, a senior research fellow from the Chinese Academy of International Trade and Economic Cooperation, said the complementary needs in the coal sector between China and Australia. The past instability in bilateral relations has caused concerns among Chinese companies about the stability of economic cooperation, thereby reduced coal imports from Australia, Zhou said.

Australia, as a major resource exporter, has greatly benefited from the Chinese market. The rapid growth in China-Australia trade in the past decades have reflected the complementary nature of the two markets, Zhou added.

The stability of the China-Australia economic and trade relationship is very important for the Chinese market, as companies need to set up its future production, logistics and processing plans based on market evaluation. If China-Australia relations become unstable once more, companies will look for alternative source of coals, Zhou explained.

The recent improvement in relations has sent a stabilizing signal to the Chinese market, encouraging a resurgence in coal trade, Zhou told the Global Times.

Despite robust trade figures, Australia's coking coal exports to other major Asian markets like India and Vietnam have declined, with shipments to India dropping by 6.5 percent and to Vietnam by a striking 42.5 percent, as per BigMint data. Thermal coal exports mirrored this trend, with a notable 51.2 percent decrease to India and a 9.6 percent drop to Vietnam.

A report commissioned by the Australia China Business Council, highlighted the extensive economic benefits of China-Australian trade, noting a significant boost in disposable income for Australian households linked directly to trade with China.

This report underscores the mutual benefits and potential for future cooperation, enhancing both economies. "China's development represents an opportunity, not a challenge, for Australia. The two countries have much to offer each other and share a promising future for collaboration," said Chinese Foreign Ministry spokesperson Lin Jian at a press briefing on Friday.