Free trade pact to cut costs of coal and iron

"The increasing Australian thermal coal imports will worsen domestic coal companies' profits because Australian coal has better price competitiveness compared with domestic sources," she said.

Although some Chinese companies will face tougher competition from Australia, the agreement also offers opportunities to other industries such as steel and manufacturing, said Wei Zengmin, an analyst from steel information provider mysteel.com.

He said Australia's infrastructure construction projects will generate demand for steel products and steel structure, which Chinese companies can provide.

"However, Chinese steel exports often face anti-dumping investigations in foreign markets, and Australia is not an exception. Thus, Chinese steel companies should be aware of potential trade disputes in their overseas market expansion in Australia," Wei said.