China cuts coal imports, buys more oil and gas in July

[SINGAPORE] China’s coal imports fell for the fifth time in six months in July as Beijing leans more on domestic mining, while boosting oil and gas imports to meet energy needs.

At the same time, rising exports to Asean underscores the country’s growing trade focus on regional partners as negotiations with the US progress.

Based on data from China Customs Statistics released on Thursday (Aug 7) compiled by Trade Data Monitor, China’s coal imports dropped 22.9 per cent on the year to 35.6 million tonnes in July, despite a slight rebound from June’s two-year low of 33 million tonnes.

The cutback coincided with surging oil and gas shipments, with China’s natural gas imports rocketing 82.4 per cent to 10.6 million tonnes, and crude oil purchases rising 11.5 per cent to 47.2 million tonnes, Trade Data Monitor’s chief economic analyst John Miller highlighted.

He noted that the shift reflects both increased domestic coal output and the expansion of alternative energy sources such as wind and solar.

“It’s transforming its economy to become less dependent on global trade, by ramping up production in assets like coal, where it has abundant resources,” he said.

Imports from China’s top coal suppliers – Russia, Australia, Mongolia and Indonesia – all fell, with Canada the only gainer, up 13.3 per cent at 5.4 million tonnes.

The adjustment comes as China navigates tariff headwinds from its biggest export market.

The country’s overall exports grew 7.2 per cent in July to US$321.8 billion, even as shipments to the US tumbled 21.6 per cent to US$35.8 billion.

In contrast, exports to Asean climbed 16.8 per cent to US$54.6 billion, led by a 28.1 per cent jump in exports to Vietnam.

Year to date, total exports rose 6.1 per cent while shipments to the US dropped 12.6 per cent, and those to Asean grew 13.5 per cent.

Miller noted that the redirection of trade flows towards regional partners is part of Beijing’s strategy to insulate its economy from external shocks.

“Just as the new American dream appears to be a self-contained continental market, so it goes for China.

“It’s now a country that makes everything. All it needs is raw materials,” he added.