China has turned away from Russian coal in favor of Mongolian coal.

China increases coal purchases from Mongolia and Australia

According to Bloomberg, last year China significantly increased coal purchases from Mongolia and Australia, while supplies from Russia decreased. Now, as demand for coal in China stabilizes, Mongolia can maintain or even increase its market share in the country at the expense of Russia.

The total coal import volume rose by 14% to 543 million tons in 2024, with supplies from Australia increasing by nearly 60%. Coal exports from Mongolia grew by 19%. Indonesia remains China’s largest supplier, although growth here has been modest.

Russia is at a loss, as the price of its coal is high, and new US sanctions may make exports even less attractive to Chinese buyers this year.

Mongolia benefits from its remote location from China and seeks to solidify this by improving railway connections. Unlike Australia, which supplies coal from a long distance and can respond to rising prices in other Asian countries, most of Mongolia's customers are in China.

Last year, Mongolia became the largest supplier of coking coal for steel production in China. Previous disagreements about aligning the country's railway specifications with China's have been overcome, and now the Mongolian government is actively working on improving railway connections at the border, which may further lead to a doubling of coal supply volumes to China.