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Coal exports to China predicted to drop 45 per cent

Coal mine pit
Coal mine pit

Australian commodity orders are expected to significantly dwindle in parts of East Asia during the next few years, a new study found.

Researchers predict the Chinese Communist Party (CCP) will decrease annual coal imports from Australia and other nations by almost 45 per cent sometime in the year 2025.

The Australian National University (ANU) study, China’s decarbonisation and energy security plans will reduce seaborne coal imports, expects the communist-ruled country to reduce thermal coal imports from 210 megatons to just 115 megatons.

Coking coal imports will also decline by as much as 43 per cent to 20 megatons compared to 2019 levels.

“When it comes to coking coal imports Australia is the country that stands to lose the most,” lead author Jorrit Gosens said in a public statement.

The ANU energy economist believes major coal producers will suffer the “biggest losses” from the CCP’s promise to decarbonise and invest in new rail infrastructure to reduce dependency on seaborne coal imports. An estimated quarter of Australia’s thermal and coking coal exports are sent to mainland China.

“Our findings are clear: Beijing’s plans for rapid decarbonisation and energy security signal the end for Australia’s current coal export boon,” Gosens said.

“This is not going to happen far off into the future, it is imminent.”

He doubts reversing the CCP’s ban on Australian coal imports will significantly increase demand.

“Even if Australia were to reconcile its current political differences with China, it should expect Chinese demand for its coal to be well below pre-conflict levels and to keep falling from that level,” he said.

“Any Chinese reduction in demand … would free up the current suppliers to China to find new customers in the global seaborne market, where they would push out Australian suppliers.”

He also suggested the ongoing Russia-Ukraine conflict’s impact on energy supplies would push Beijing to be more independent.

“China has been investing heavily in coal transport infrastructure for many years, precisely to reduce dependency on foreign energy. The recent turmoil in global energy markets will only strengthen Beijing’s resolve to decrease its dependency on them,” he said.

Click here to read the full report.

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