Amid the China-Australia trade dispute, China has significantly increased its imports from the US, Canada, Colombia, Russia and South Africa, boosting tonne-mile demand. We expect shipping demand arising from Chinese imports to expand further despite a forecast 6.6% contraction in total imports in 2021, as the country has completely cut off Australian cargoes with the Chinese customs authorities becoming stringent and disallowing any vessel with Australian coal to discharge at its ports. Meanwhile, there have been two vital structural changes in the Chinese coal shipments: 1. The share of long-haul trade will surge despite an increase in trade on the Indonesia-China route. Indonesia has signed a $1.5 billion coal deal with China that allows the latter to import coal over three years. The deal would strengthen the trade on this route by 5-10 million tonnes annually until 2023. In 2020, China imported close to 80 million tonnes of coal from Australia but this year imports will be muted amid the coal ban. However, Australia’s share will be partially counterbalanced by Indonesia, the US, Canada, Colombia, Russia and South Africa. These five distant countries contributed 10% to China’s total coal imports in 1Q20, which strengthened to 24% in 1Q21, and this share will continue to rise in the remainder of 2021.
展开▼
