ABOUT 85 per cent of China's domestic coal production is unprofitable and Australia could be the one to benefit, -according to analysts AME. 
Despite poor -prices that might not rebound until next year, Australia's market share had climbed from 51 per cent in 2014 to 53.5 per cent last year, AME said .
That was a result of decisions by companies such as BHP Billiton to drive production to lower unit costs and win market share.
The cost of the China mines meant the import ratio was likely to increase, AME said in a report yesterday.
Coal prices were starting a gradual climb after iron ore began a rebound from its lows. The   January spot price for lower-quality metallurgical coal is $US76 ($A106) a tonne, a rise of 1.4 per cent since   December. But AME has written off 2016 for coal price strength, saying it cannot see a return to a rising trend until next year.
"AME has revised down the 2016 average premium hard coking coal contract price, rising again in 2017." China's 2015 metallurgical coal imports fell by 23 per cent to 48 million tonnes, and   December's imports were down 42 per cent year on year.
"Australia was a net beneficiary during this decline; despite imports from Australia falling 18 per cent year on year to 25.7 million tonnes, its market share increased."China's largest domestic metallurgical coal producer, Longmay Group, has cut 40 per cent of its workforce.