China’s reliance on seaborne coal imports has dramatically decreased in recent years, according to a new report by Oceanbolt, a Veson Nautical solution.
The share of Chinese coal imports transported by sea fell from 93 per cent between 2015-2022 to 76 per cent in 2023-2024, signalling a significant shift in global trade patterns.
Despite a 62 per cent surge in China’s total coal imports to 473.4 million tonnes in 2023, seaborne imports only increased by 45 per cent.
This disparity highlights China’s strategic move to diversify its coal supply sources and capitalise on geopolitical uncertainties.
Australia has borne the brunt of this shift, with its share of China’s coal imports plummeting from 26 per cent in 2019 to just 11 per cent in 2023.
The decline is particularly stark in the coking coal trade, with China importing a mere 2.8 million tonnes of Australian coking coal in 2023, a 91 per cent drop from pre-ban levels.
Russia has emerged as a growing supplier, increasing its share of Chinese coal imports from 11 per cent in 2019 to 22 per cent in 2023.
The Russia-China coal trade surged by 20 per cent in 2022 and a further 50 per cent in 2023, reaching 102 million tonnes.
Mongolia has also become a major player, with its coal exports to China soaring by 125 per cent in 2023 to 70 million tonnes.
As a landlocked country, all of Mongolia’s exports are transported overland, effectively replacing seaborne volumes previously sourced from Australia.
This shift towards land-based coal imports is having significant repercussions for the bulk carrier sector.
Mikkel Nordberg, Senior Maritime Analyst at Veson Nautical, noted: “This development has unquestionably hurt the Capesize and the Panamax class vessels, which are the largest carriers of Chinese coal imports.”
The report concludes that the increase in land-borne coal volumes could have led to a 1 per cent loss in total tonne-mile demand growth last year.
This trend has been particularly evident in Panamax freight rates, which underperformed compared to Supramaxes in Q3, with the usual seasonal rebound in Q4 failing to materialise.
As China continues to diversify its coal supply sources and invest in land-based transportation infrastructure, the maritime industry may need to adapt to these changing trade flows in the coming years.
