China fuelling US coal revival

China fuelling US coal revival, by Timothy Puko.

China’s re-emergence as a coal importer has boosted the fortunes of US producers who are now shipping more coal abroad than any time in the last two years. …

That growth comes at a time when President Donald Trump has vowed to end a long decline in the US coal business. Hundreds of mines have closed in recent years largely because of increasing competition from other fuels, and the Trump administration has pushed to cut regulations that make coal even less competitive.

But market forces, especially China, have a much bigger influence than anything the Trump administration has done, analysts said. While that has worked in the administration’s favour so far, it could also overwhelm its deregulation efforts and put the coal industry into retreat if those factors swing back the other way. …

China set the rebound in motion a year ago as global prices and US exports were bottoming out. In the middle of a worldwide glut, China used new environmental rules to limit the number of days its domestic mines could work. … Sharp capacity cuts hit as industrial demand took off and global benchmark prices are up 50 per cent to 100 per cent from about a year ago.

As China imported more, it shifted trade and prices rose worldwide. Russian, African and South American coal that once went to Europe has been going to China, analysts said. Importers all over the world have to pay more to fill the gap left behind.

Meanwhile in Australia we are having difficulty selling the Indians our coal from Adani …

hat-tip Nick