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China diversifies coal imports by ditching Australian goods

Mining industry / Russia / Australia / Asia

Australia's threats to investigate the causes of the coronavirus have prompted a response from China, which is systematically reducing imports of Australian commodities.

China diversifies coal imports by ditching Australian goods

Coal imports to China fell to their lowest level this year in October, with supplies from Australia hitting particularly hard amid ongoing political divisions.

According to customs data, China imported 13.73 million tons of coal of all types in October, which is 27% less than in September and 47% less than in October 2019.

A breakdown of imports by country is not yet available, but Refinitiv's vessel and port tracking data show that both of the top suppliers, Australia and Indonesia, saw significant declines.

According to Refinitiv, sea imports in October amounted to 10.03 million tons, with the difference from official data explained by customs data, including land imports from neighboring countries, mainly from Mongolia.

Indonesia was the main supplier of sea imports with 3.14 million tons, which is 26.8% less than in September. China's imports from Australia fell to 2.25 million tons, 62% less than in September.

These numbers suggest Australia is indeed Beijing's target, as the government is upset about Canberra's calls for an international investigation into the origin of the new coronavirus.

The cooling in relations between China and Australia has not only affected coal, as customs officials told importers that shipments of copper ore, barley, sugar, timber and lobsters will also be subject to heightened checks.

However, so far, Beijing has avoided escalating restrictions on two really important commodities: iron ore and liquefied natural gas, perhaps because it will be more difficult for China to find alternative sources of supply, especially iron ore.

In addition, China appears to be trying to diversify its coal suppliers, with supplies from Russia increasing sharply this year.

China's maritime imports from Russia in the first 10 months of the year amounted to 28.57 million tons, which is 25.8% more than in the same period last year.

There is another trend to keep in mind: China is limiting customs clearance for coal towards the end of the year, in an effort to keep imports fairly constant on an annual basis.

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