Korean conflict

In 2016, China imported 22.5 Mt of coal from North Korea, which represents 12% of the secretive state’s exports, according to BMI Research, a market analysis company. The ban will be a boon for coal prices, said BMI Research’s global commodities strategist, John Davies. “It would be a material net positive for seaborne coking coal prices,” said the Londonbased analyst. “The need to source this coal  from elsewhere would boost demand for imports from countries including Australia and Mongolia.”
Traders and steel mills in China were busy finding alternatives for coking coal, turning to domestic coal, which is more expensive, or imports. While increased demand may help China’s own coal production, it will also put pressure on supply. “Chinese authorities appear to be strongly committed to their goal of closing outdated coal mines and boosting clean energy,” said Ricard Torné, senior economist at FocusEconomics, a research and analysis company. “In this regard, the ban on North Korean coal imports has the potential to further stimulate China’s energy transition.”
However, the ban still needs to be enforced, with some markets sceptical that this would be achieved. China can import North Korean coal, as the United Nations Security Council resolution on sanctions against Pyongyang includes a humanitarian exemption. “In 2016, China had already banned imports from its nuclear-power-holding neighbour, though it made expectations for shipments intended for the ‘people’s well-being’ and not related to the missile programs, which, in practice, allowed North Korea to keep its supply of coal flowing,” said Torné.