SINGAPORE - Despite an overall decline in China's coal imports in July, the country's imports of Australian coal increased, driven by strong demand from utilities due to high electricity consumption during hot weather. According to data from the General Administration of Customs, China imported 6.31 million metric tons of Australian coal last month, up from 4.83 million tons in June, marking the highest level in three years.

Of the Australian coal imports, 6.15 million tons were thermal coal used for power generation, and an additional 161,619 tons were coking coal used in steelmaking. This rise in Australian coal imports occurred as China's total coal imports decreased by 1.5% in July compared to June.

The demand for high-quality Australian thermal coal is particularly strong in the summer months when households increase their air conditioning usage, leading to higher electricity consumption. In July, Australian thermal coal with an energy content of 5,500 kilocalories was traded at a price up to 70 yuan ($9.62) per ton lower than domestically produced coal of the same quality in the southern port of Guangzhou.

Market analysts and participants anticipate that Australian coal imports will remain elevated throughout the year, assuming there are no policy changes. This is supported by favorable import profit margins and reduced domestic output due to stricter safety inspections in mines.

Although imports of Russian coal declined slightly in July to 8.99 million tons from the record 10.65 million tons in June, they still showed a 21% increase from the same month last year. Conversely, imports from Mongolia, primarily coking coal, grew by 13% from June to reach 5.94 million tons, despite a decrease in steel production affecting demand for steelmaking raw materials.

Customs data also revealed that China imported 15.83 million tons of Indonesian coal in July, down slightly from 16.32 million tons in June.