With the Communist Party banning coal imports from Australia, major coal user China is turning to other countries for coal, and the North American coal industry appears to have become the main target of China’s search.
Hong Kong’s South China Morning Post reports that U.S. coal exports to China have risen steadily since last October. U.S. coal exports in March were about 663,000 tons, more than twice the amount exported in February, Chinese customs data showed.
Gerry Spindler, CEO of Coronado Global Resources, said in a first-quarter report that the company’s Buchanan and Logan County coal mines in the U.S. have expanded this year, according to credit rating agency S&P Global. County coke mines in the U.S. have expanded production this year in response to strong demand from multiple markets.
The South China Morning Post also reported that coal imports from the United States will also help China meet its commitment to buy an additional $52.4 billion worth of energy products from the United States between 2020 and 2021, a commitment it made in the first phase of a trade agreement signed last January.
A report released Tuesday by the Peterson Institute for International Economics showed that China’s energy product imports reached 67.1 percent of its year-to-date target, compared with 34.4 percent during the same period last year. 34.4 percent for the same period last year.
Canada appears to be another beneficiary. S&P Global says Canada’s Teck says Chinese demand for its coking coal will remain strong.
Teck CEO Don Lindsay said Wednesday (April 28): “We continue to prioritize spot sales in China, which we expect will continue to result in favorable price realization.”
The Chinese Communist Party has taken a series of economic “punitive measures” against Australia following Australia’s request last year for an international investigation into the source of the Chinese virus. These include restrictions on imports of certain products and punitive tariffs, which have affected Australian products such as beef and wine, as well as a formal ban on coal imports from Australia late last year.
China is one of the world’s biggest users of coal, and CNBC reported that some parts of the country restricted local power use late last year, citing coal shortages as demand for electricity soared. Official figures show that China’s electricity consumption grew by 3.1 percent last year.
The CNBC report also cited analysts at China Renaissance in a report last month saying the Communist government aims to reduce the share of heavy carbon fuels in the country’s energy consumption to 20 percent by 2025. But they also said the declining cost of renewable energy would not be enough to prompt a major shift in the industry.
The report said, “We believe that the current generation system overwhelmingly favors coal-fired generation, in part because it is more stable and faces less variability than wind and solar generation.”
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