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China ban may bite US

THERE has been a lot of noise of late about China's plans to ban imports of thermal coal with rel...

Noel Dyson

This is particularly of concern to Indonesian coal suppliers. It also could be a problem for some US exporters, according to an American executive.

Bloomberg News reports XCoal Energy & Resources chief executive officer Ernie Thrasher saying many Chinese customers could “consume higher sulfur coal without polluting the environment”

However, China may ban purchases of coal with a heating value below 4500 kilocalories a kilotgram, sulfur about 1% and ash above 25%.

Thrasher told Bloombergthat the US shipped about 4 million tonnes of higher heating value and high sulfur power station coal to China every year.

“Mining companies exported their coal to liquidate inventory,” he said.

“That was an anomaly that occurred from February 2012 to June 2012.”

However, with coal prices plummeting – they have fallen more than half from the peak in mid-2008 – it will make it harder for US producers to keep shipping low-sulfur coal.

That coal has higher production costs and the existing prices make that a harder proposition to maintain.

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