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President Donald trumpIts efforts to help the US coal industry domestically are being undermined by declining sales abroad amid its trade war ChinaNew government reports show.
China has halted imports of US coal as US coal exports have declined 14% so far this year, according to analysts and the US Energy Information Administration.
Trump meets Chinese leader Xi Jinping This week indicates business progress. But whether this will include the US coal industry is still uncertain.
“It’s hard to tell whether this will maintain the status quo or lead to an increase in coal and soybean exports to China,” Seth Feaster, a coal analyst at the Institute for Energy Economics and Financial Analysis, said Friday.
Trump is relaxing regulations and opening up mining on federal lands. The result is “our lights will remain on, our economy will remain strong and America will remain energy dominant,” Interior Department spokeswoman Charlotte Taylor said in an emailed statement Friday.
The administration also reduced royalty rates for coal mined from federal lands and in September pledged $625 million to boost coal power generation, including recommissioning or modernizing older coal plants amid rising power demand from artificial intelligence and data centers.
In recent government coal lease sales Montana, Wyoming and Utah, however, failed to produce bids deemed acceptable by the Interior Department.
Fester said that so far this year, U.S. coal production has increased about 6% not because of Trump policies but because of higher natural gas prices.
Meanwhile, according to the EIA report released on October 7, coal exports from January to September fell 14% compared to the same period last year.
The decline followed additional Chinese tariffs of 15% on US coal in February and a reciprocal Chinese tariff of 34% on imports from the US in April, the EIA said in a report released on Friday.
The US exports about one-fifth of the coal it produces. Most goes to India, the Netherlands, Japan, Brazil and South Korea.
China is not the top destination, accounting for only about one-tenth of U.S. coal exports. But Andy Blumenfeld, a coal analyst at McCloskey, said OPIS blocking all coal from the U.S. through April has had an outsized impact on overall U.S. coal exports.
About three-quarters of U.S. coal exported to China last year was metallurgical coal used in steelmaking. According to Blumenfeld, the rest was thermal coal burned in power plants to produce electricity.
Nearly all US metallurgical coal is mined in Appalachia, while the bulk of US thermal coal comes from huge, open-pit mines in the Powder River Basin of Wyoming and Montana.
Blumenfeld said by email that Appalachia would benefit most from the resumption of U.S. coal exports to China.
“There is optimism,” Blumenfeld wrote. “But there’s very little documentation to support it right now.”
According to Blumenfeld, most of the coal shipped to China last year went through Baltimore, while smaller amounts went through the Norfolk, Virginia, area and the Gulf of Mexico.
Relatively little thermal coal is exported from the western US because of the cost of transporting it by rail to the West Coast, where there has also been political opposition to building port facilities to export more coal.