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Analysis and Studies - Country Analysis

Mongolia: a look at the market

By SkyMinder Sales Enablement Team October 15th 2024

Mongolia is a vast, landlocked country in Central Asia, with a rich history as the heart of the Mongol Empire under Genghis Khan, and has Ulaanbaatar as capital and largest city. It features mountainous regions and grasslands like the Gobi Desert. The population, mostly Mongol, follows Buddhism, and many people still live as nomadic herders. Mongolia became independent from China in 1912 and transitioned to democracy in the 1990s after communist rule. 

The flag consists of three vertical stripes of equal width: red on the hoist side, blue in the center, and red on the fly side. Positioned centrally on the red band nearest the hoist, there is the national emblem, the "Soyombo," a stylized arrangement of symbols representing fire, the sun, moon, earth, water, and yin-yang. The blue stripe symbolizes the sky, while the red stripes stand for progress and prosperity.

Mongolia has a high level of specialization in Animal Hair (899) $430M, Feldspar (112) $118M, Copper Ore (52.9) $2.73B, Coal Briquettes (39.9) $6.48B, and Zinc Ore (34.6) $280M.

 

 

In 2022, Mongolia was the 94th in total exports, with a trade of $13.6B, and the 125th in total imports, with a trade of $8.49B.

In 2022 the most exported product was Coal Briquettes, with a trade of $6.48B, followed by Copper Ore ($2.73B), Gold ($2.05B), Animal Hair ($430M), and Iron Ore ($389M), exporting mostly to China (77.8%), Switzerland (14.6%), Singapore (2.55%), South Korea (1.9%), and Russia (0.83%).

Mongolia's economy relies heavily on its mineral resources, with most of its exports focused on raw materials. China is the dominant trading partner, particularly for coal, copper ore, and iron ore, driven by its size, proximity, and industrial demand, making Mongolia both economically reliant on and vulnerable to shifts in Chinese demand.

At the same time, Mongolia's gold trade primarily involves Switzerland, highlighting its role in global precious metal markets, while its animal hair exports tie it to both China's mass production and Europe's luxury markets, particularly Italy. Despite this diversity in export products, Mongolia's heavy dependence on China points to the need for greater market diversification to mitigate risks.

  1. Coal Briquettes (47.7%): 92.4% China, 5.2% Singapore, 2.31% South Korea
  2. Copper Ore (20.1%): 100% China
  3. Gold (15.1%): 96.3% Switzerland, 3.71% South Korea
  4. Animal Hair (3.16%): 81.4% China, 16.3% Italy, 1.47% United Kingdom
  5. Iron Ore (2.86%): 100% China

Whereas the most imported product was Refined Petroleum, with a trade of $1.55B, ahead of Cars ($524M), Delivery Trucks ($333M), Trailers and semi-trailers, not mechanically propelled vehicles ($229M), and Raw Iron Bars ($211M), importing mostly from China (36%), Russia (28.7%), Japan (6.8%), South Korea (5.15%), and United States (2.84%).

Mongolia's import landscape highlights a significant dependency on neighboring countries, especially Russia and China, for essential products. The largest import category, refined petroleum, is predominantly sourced from Russia, underscoring the country's reliance on its neighbor for energy needs.

In contrast, the automotive sector sees Japan as the leading supplier of cars, indicating a preference for high-quality vehicles, while China takes a commanding lead in the delivery truck and trailer markets. Furthermore, the import of raw iron bars showcases a near-equal reliance on both Russia and China, reflecting a balanced approach to sourcing crucial materials for construction. Overall, Mongolia’s import dynamics reveal a clear dependence on regional partners for vital resources and goods, while also emphasizing a strategic effort to diversify supply sources across different sectors.

  1. Refined Petroleum (18.2%): 92.7% Russia, 3.09% China, 1.39% South Korea, 1.15% Singapore
  2. Cars (6.17%): 71.8% Japan, 8.2% United States, 5.82% China, 2.34% South Korea, 3.33% Austria, 2.91% Germany
  3. Delivery Trucks (3.92%): 68.3% China, 12.2% Japan, 6.97% United States, 6.08% South Korea, 1.82% Belarus, 1.47% Russia
  4. Trailers and semi-trailers (2.7%): 98.9% China
  5. Raw Iron Bars (2.48%): 55.6% Russia, 44.1% China

Between 2021 and 2022 the country with the fastest growth in exports was China, with an increase of $2.93B, ahead of Singapore ($90.7M), and South Korea ($37.5M).

 

 

  1. China: from $7.64B to $10.6B
  2. Singapore: from $255M to $346M
  3. South Korea: from $221M to $259M

Whereas the fastest growing importer was Russia, with an increase of $623M, followed by China ($567M), and Japan ($94.5M).

 

 

 

  1. Russia: from $1.82B to $2.44B
  2. China: from $2.49B to $3.06B
  3. Japan: from $483M to $577M

Sources: 

https://oec.world/en

https://www.cia.gov/the-world-factbook/countries/