China cuts Australia coal imports 34% on congestion

Beijing, Jan 27 | Updated: Jan 28 2008, 05:03am hrs
China cut its 2007 coal imports from Australia by 34% as insufficient rail and port handling facilities restrict shipments from the worlds biggest exporter of the fuel.

China increased coal purchases from countries including Indonesia, North Korea and Vietnam to offset the decline from Australia, figures released in Beijing on Sunday by the Customs General Administration of China show. Shipments from Vietnam accounted for half of Chinas total imports.

Bottlenecks at Australian ports have constrained supplies of the fuel to Asian customers, boosting spot prices to a record and increasing costs for mining companies. Rio Tinto Group, Xtrata Plc and other mining companies planned to ship 18% more this year than Newcastle, the worlds largest thermal coal export harbor, will be capable of handling.

China, the worlds biggest consumer and producer of the fuel, reduced its coal imports from Australia to 4.52 million tonne last year, the customs figures show. It increased purchases of the fuel from Indonesia by almost three fold to 14.1 million tonne. Imports from Vietnam rose 23% to 24.6 million tonne, and shipments from North Korea climbed 51% to 3.7 million tonne.

China, the worlds fastest-growing major economy, will remain a net coal importer for most of this year on energy demand and constraints on exports, the Beijing-based National Development and Reform Commission said last month.

The nation became a net importer of coal for the first time in January last year, cutting shipments to Asian customers and worsening a shortage of the fuel in the region. Consumption, spurred by global economic growth, has outpaced gains in output from Australia and Indonesia.

Outward shipments of the fuel have very limited room to rebound as the appreciation of the nations currency increases export costs and as long-term contract volumes decline, the commission, the countrys top economic policy planning agency, said in December. Exports of the fuel fell 16% last year while imports rose 33%.

Coal demand in China may rise 5.3% to 2.76 billion metric tonne this year, the Coal Sales and Transportation Association of China said on January 15.The Australian Competition and Consumer Commission last month gave interim approval to extend the use of a coal-export quota system at Newcastle to help prevent an increase in shipping delays.