US coal heading for China amid new tariffs loom

Source:Reuters-Global Times Published: 2018/8/9 22:13:43

At least four ships carrying US coal worth $30 million are headed to China as Beijing prepares to hit imports with hefty 25-percent tariffs, threatening a niche supply of the fuel even as China's appetite for foreign coal shows no sign of abating.

The vessels, carrying a combined 335,000 tons of coal, are the only confirmed cargoes in transit from the US to China, and they are scheduled to land in time to avoid the new duties.

On Wednesday night, in response to new US tariffs on Chinese goods, the Chinese Ministry of Commerce published its final list of US items worth $16 billion that will incur an additional 25-percent tariff, including coal.

The US shipped 3.2 million tons of coal to China last year, up from 700 tons in 2016, making it China's seventh-largest supplier, although well behind top supplier Australia with nearly 80 million tons.

But it takes six weeks for a ship to travel from the US, compared with several weeks for Indonesia and Australia. It also costs more to ship from the US, and US coal is of lower quality than Australian coal. That means replacing US shipments with coal from other places may not be difficult, sources said.

Posted in: ECONOMY

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