China’s coal imports from Mongolia doubled in 2023 from the previous year and set a record. Experts point out that in 2024, due to the development of coal transport infrastructure and low prices, it is likely to set a new record. As for Mongolia, the newly expanded coal transportation road increases the intensity of coal transportation, so the amount of coking coal China will receive from Mongolia in 2024 is likely to increase by more than 10 percent from the previous year, Beijing-based coal trading officials have estimated.
During the Australian coal embargo, the Chinese government saw Mongolia as a promising country to replace the country, since then has been working to improve transport relations, including the necessary infrastructure. In this context, in order to increase the import of coal from Mongolia, the Chinese side invested 40 million yuan (5.58 million US dollars) in Ganzmod port, which receives about 60% of Mongolia’s coking coal exports, and improved its infrastructure, according to Chinese state media.As a result, in the first week of December 2023, an average of 1,136 trucks entered Gantz Mod port per day, an increase of 39% compared to the same period last year.
In addition, analysts concluded that the decline in the profits of steel producers due to the collapse of the Chinese real estate industry increased the demand for cheap coal in Mongolia. Simon Wu, a consultant at Wood Mackenzie, said, “China’s steel mills, which are struggling to survive, cannot afford to buy coking coal that is too expensive.” In addition, China bought coking coal from Mongolia last year for an average of 974 yuan or 135.98 US dollars per ton, which is 20% cheaper than Russian coal and 50% cheaper than Australian coal.
Source: Reuters
