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China Considers More U.S. Coal Imports to Cut Deficit

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Bloomberg

China is considering a plan to buy more American coal as part of an effort to narrow its trade deficit with the U.S., according to people with knowledge of the matter.

Chinese officials are currently looking at boosting purchases from West Virginia in particular, said the people, who asked not to be identified because they’re not authorized to speak publicly. They didn’t say whether Beijing is looking at buying more supplies from other states. A final decision hasn’t been made, they said.

The country’s top economic planner, the National Development and Reform Commission, referred questions to the National Energy Administration; officials there didn’t reply to an email seeking comment.

China this month pledged to increase purchases of U.S. energy and agricultural goods as a way to reduce its $375 billion merchandise trade deficit and diffuse an escalating trade war between the world’s biggest economies. More imports by the Asian nation would be a boon for American coal-producing states — including West Virginia — that supported Donald Trump’s presidency on the back of his pledge to revive the ailing industry.

While China pursues a long-term goal of lowering coal’s share of its energy mix, the country still produces, consumes and imports more of the fuel than any other nation. It purchased 271 million metric tons from overseas last year, according to customs data. The U.S. exported about 3.2 million short tons to China, data from the Energy Information Administration show.

The total value of U.S. coal exported to China last year was about $395 million, based on an average price of $122 per ton, Andrew Cosgrove, a Bloomberg Intelligence analyst said in an email. About 90 percent was metallurgical coal, which is used to make steel, he said.

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