Japanese steel mills, which last year secured more than 50% of their coking coal from Australia, are looking to North America, Africa and Indonesia. South Korea is the second-biggest importer of Australian coal after Japan.
Chinese imports of coking coal increased from 6.85 million tonnes in 2008 to 34.49 million in 2009. But with the world's biggest coal reserves, China, the world biggest steelmaker, has only recently become a coal importer.
Galaxy Futures analyst Ms Liu Huiru said that Australia provided about 38% of China's coal imports. She said that "Along with the recovery of the international economy, China will face competition from other countries in demand for coke. Imports from Australia, the US and Canada might decrease, while imports from Mongolia might increase, and the same with Russia.”
Mysteel.com analyst Zhu Xi'an said that major coking suppliers in China's coal producing provinces of Shanxi and Hebei had raised prices about CNY 100 (USD 15.40) a tonne since the start of the year, especially since news of the floods spread.
He said that "So far the floods are a short term effect, but if the situation in Australia does not improve by March the market here might have a stronger response."