Last week’s missile test in North Korea has brought in many repercussions one of them being China’s move to ban shipments of coal from North Korea. China has decided to import more coal from the United States.
This comes after President Trump met with Chinese President Xi Jinping at his Mar-a-Lago resort in Florida. Trump’s administration had pointed out that North Korea's missile tests would be a top priority in the talks with the Chinese counterpart.
Reports from Reuters on Tuesday indicated that China's customs department ordered all companies that receive imports from North Korea to immediately return all coal cargoes. The information was revealed by three trading sources that saw the order. Reports indicate that the order was sent by the Chinese government on April 7.
The move will be a boost to the U.S. coal producers as China has ramped up orders of U.S. coking coal used in making steel. President Trump has just fulfilled his pro-fossil fuel agenda to put miners in coal country back to work by increasing U.S. coal imports.
The spokesman for the National Mining Association, Luke Popovich echoed Trump’s statement in an email to the Washington Examiner in which he said that he'd be good for coal, adding that he didn’t think he meant N. Korean coal.
The factors in the coal sector are at an ideal condition for U.S. producers. One of them being that Tropical Cyclone Debbie has knocked out coal terminals in Australia last month. Australia is a top producer and exporter of coking coal for steel-making in Asia. As a result, that type of coal increased in price due to the shortage in supply in China. However, the pricing started returning to normal on Tuesday.
Reports from the government's Energy Information Administration indicated that consumption of coal in the U.S. will continue growing going into the summer. The report which was released on Tuesday was based on the latest monthly short-term outlook.
The acting EIA Administrator Howard Gruenspecht said that U.S. coal production is expected to rise this year due in part to expected higher coal-fired electricity generation. He also revealed that the amount of electricity generated from natural gas this summer is forecast to be lower than last summer based on the high natural gas prices.
Much of the U.S. had displaced coal with natural gas as the top fuel for power generation. However, this is bound to change as coal is beating out gas in some regions such as the East Coast. President Donald Trump has just won again by fulfilling one of his campaign pledges.