Caixin
Jul 23, 2021 07:54 AM
WORLD

Record U.S. Coal Shipment to China Highlights Australia’s Pain

Metallurgical coal prices have rallied this year on strengthening global steel demand.
Metallurgical coal prices have rallied this year on strengthening global steel demand.

(Bloomberg) — China’s import ban on Australian coal is proving a boon to American producers.

On June 28, the Frontier Unity bulk vessel left the port of Newport News, Virginia, with a 136,400-ton cargo bound for steelmakers in China. It was the biggest shipment of its kind from an east coast U.S. port, according to mining company Coronado Global Resources Inc.

The shipment marks a stark turnaround in the fortunes of Coronado’s U.S. mines, which were temporarily idled in March last year after pandemic lockdowns crushed demand. The company is benefiting from a rally in prices and China’s ban on Australian coal, which in March helped boost American exports to the Asian nation to their highest since 2013.

“As a critical global supplier of metallurgical coal, our geographic diversification continues to benefit us as the Chinese import restrictions on Australian coal continue,” said Gerry Spindler, chief executive officer of Coronado, in a statement Thursday. The company operates coal mines in the U.S. and Australia. “Our U.S. operations continue to successfully move met coal into China at record levels.”

After the U.S. engaged in a highly public trade spat with Beijing under the Trump administration, it is coal from Australia that was singled out for sanctions after diplomatic tensions between the two countries escalated last year. BHP Group, one of the biggest coal producers in Australia, said earlier this week that it expected the ban to remain in place for years.

Metallurgical coal prices have rallied this year on strengthening global steel demand. Coronado’s average selling price across the portfolio was $105 per ton in the June quarter, up 11% from the previous quarter.

Contact editor Bob Simison (bobsimison@caixin.com)

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