The Big Name in Coal’s Resurgence: China

[IsailedawayfromFR]

China’s reemergence as a coal importer has boosted the fortunes of U.S. producers who are now shipping more coal abroad than any time in the last two years.
By Timothy Puko

China’s reemergence as a coal importer has boosted the fortunes of U.S. producers who are now shipping more coal abroad than any time in the last two years.

The trend has helped solidify a business that at the beginning of last year was suffering through a spate of bankruptcies and threatened with more. Revenue at publicly traded U.S. coal companies grew 19% in the first half of this year compared with the same period a year ago, and the biggest gains came at companies helped the most by exports, according to data compiled by Doyle Trading Consultants, a coal-market-analysis firm.

That growth comes at a time when President Donald Trump has vowed to end a long decline in the U.S. 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 favor 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 is 100% the key determinant,” said Mark Levin, analyst at Seaport Global Securities LLC. “That’s difficult for anyone in the United States to get a clear angle on.”

China set the rebound in motion a year ago as global prices and U.S. exports were bottoming out. In the middle of a world-wide glut, China used new environmental rules to limit the number of days its domestic mines could work. And new price controls that increased intervention as prices moved outside a “green” zone of $70 to $80 a ton also curtailed production. Sharp capacity cuts hit as industrial demand took off and global benchmark prices are up 50% to 100% from a year ago.
http://www.cetusnews.com/business/The-Big-Name-in-Coal%E2%80%99s-Resurgence--China-.H1gS7UElt-.html