Mongolian coking coal exports to China could rise to a record level in 2024 due to improved transport links and lower prices compared with domestic and international supplies in 2023, traders and miners say.
China is the world’s largest steel producer and coal importer. Increased supply from Mongolia could come from imports of steel raw materials from Australia. Australia, the second largest coking coal producer in the world, was China’s largest supplier before the 2020 diplomatic dispute.
China plans to import 100 million tons of coal from Mongolia next year, building a cross-border railway and expanding roads that will allow more coal imports from Mongolia.
Since coal imported from Mongolia is relatively cheaper than Australian coal, a policy of increasing coal imports from the country is likely in the future, Hellenic Shipping notes.
Last year, more than 50 million tons of coal were imported from Mongolia. Import volumes have doubled the 2022 level.
Coal imports from Australia fell by 2.3 million tons in the first 11 months of the year, according to Chinese customs data.
JSC Tavantolgoi’s shares have doubled since the start of 2023, while shares of Hong Kong-listed Mongolian Mining Corp (MMC) have tripled in price due to increased imports.
A new railway line connecting the Gashuunsukhait-Gantsmod ports was built, and Mongolia’s export cargo volume by all types of railways is expected to increase from 8.2 million tons in 2023 to 80 million tons by 2030, the People’s Daily reported.