Export expansion by China has reduced the market share of most competing exporters in the key Asian steaming coal markets of Japan, Korea and Taiwan, the Australian Bureau of Agricultural and Resource Economics said in its recent study, "China's Changing Coal Industry".

In 1998 China's share of Japan's steaming coal imports was 14% and grew to 22% in 2001. Its share of the Korean steaming coal market has grown much quicker and now stands at 54%, compared to 19% in 1998.

The release of ABARE's report came as Xstrata Coal chief executive and Australian Coal Association chairman Peter Coates said Australian coal producers needed to focus on stabilising their export markets rather than granting significant price reductions, the Courier-Mail reported.

The increase in exports is underpinned by a decrease in China's coal consumption as the country recently switched from coal to petroleum products, natural gas and electricity.

Another factor in the falling consumption has been China's economy-wide economic reforms, including the closure or merger of some large and inefficient state-owned enterprises and the closure of small plants in key industry sectors.

Coal production has also fallen after recent government rationalisation closed up to 80,000 small coal mines.

Significant rail and port infrastructure has been developed to facilitate China's growing export business including. These developments have reduced congestion and delays in coal transport and have increased coal transport flexibility. ABARE said transport infrastructure is particularly important to China as the majority of its coal reserves are situated in the north and northwest of the country.

ABARE has predicted China's coal production will continue to grow by 2.4% a year to 1.76 billion tonnes by 2015. Exports are expected to rise by 1% a year to reach 105Mt by 2015. The majority of China's coal exports will continue to satisfy demand in key Asian markets.