* Australian shipments still down 14.6 pct y/y as demand wanes
* Imports from North Korea surge, overtaking Indonesia
* Domestic supplies dwindle as producers minimise losses (Adds detail, prices, background)
By David Stanway
BEIJING, July 21 (Reuters) - China imported 6.67 million tonnes of coal from Australia in June, up 36 percent on the month as domestic supplies dwindled and seasonal demand from power plants improved, data from the country's customs authority showed on Tuesday.
The volume was still down 14.6 percent from a year ago, hit by stricter quality inspections at China's ports and as demand remained weak compared with levels in 2015.
According to data from China's General Administration of Customs on Tuesday, North Korea overtook Indonesia to become the second biggest coal exporter to China in June, with its shipments rising 42.8 percent on the year to 2 million tonnes.
North Korea appears to have benefited from its relatively low costs, with average prices at $53.5 per tonne, much lower than the $77 per tonne charged for Australian shipments.
Imports from Indonesia fell 49.8 percent on the year to 1.88 million tonnes in June. But from a month ago, shipments from the Southeast Asian country rose 1.1 percent.
Overall imports, excluding lower grade lignite, reached 13.7 million tonnes in June, down 28.7 percent on the year but rising 28 percent compared to May.
For the first six months of the year, coal arrivals fell 38.1 percent to 76.1 million tonnes.
Analysts said the month-on-month improvement in imports was a result of dwindling domestic supplies, with many local miners slashing production in order to minimise their losses.
China's coal sector has been hurt by chronic overcapacity as well as the country's "war on pollution", while a 20 percent drop in coal prices SH-QHA-TRMCOAL this year has further eroded producers' margins.
The Sichuan Coal Industry Group, among the biggest producers in southwest China, said last week that it had been forced to suspend operations at some of its mines in order to shield it from plunging prices.
China's total coal output in June fell 4.9 percent on the year to 327 million tonnes. Top producer Shenhua 601088.SS 1088.HK slashed output by 10.9 percent last month. ID:nL3N1002UP
In a bid to ease a supply glut, Beijing has sought to restrict the entry of low-grade foreign coal, and an Australian industry group complained this month that its exporters were being unfairly discriminated against, with cargoes said to have been turned away by Chinese ports. ID:nL3N0ZI2U9
China's Ministry of Commerce has, however, denied that there were any policies aimed at restricting Australian imports, noting that coal was covered by a free trade agreement between the two countries. ID:nL4N0ZT1L2
(Editing by Himani Sarkar)