China Coal Imports Are Getting More Expensive

by BWK ~ February 20, 2008

More on the China energy picture…

During the Vietnam War, China and Vietnam were “as close as lips and teeth.” But even the need to fight their common U.S. enemy cannot make up for 1,000 years of the Chinese and Vietnamese living near each other as neighbors.

The Vietnamese have figured out that they can burn coal at home and use the power for their domestic economy. And the Vietnamese have also figured out that they can charge higher prices for the coal that they export. So the result is that the Chinese and Vietnamese are not seeing eye to eye (or, “lips and teeth”) on this point of energy any more.

Vietnam will first cut, and then suspend coal shipments to China. In the gross scheme, the Vietnamese exports are a small part of Chinese coal consumption. But then again, the coal would have gone to Guangxi and Guangdong. So these locales will have to scramble for alternative supplies. From where? China is shutting down unsafe mines, and not opening much in the way of new pits.

Once again, we see where international energy flows are breaking out of the traditional channels. Or maybe those energy flows are breaking down?

As a Chinese philosopher said, “a trickle becomes a flood.”

More Here:
http://www.energy-daily.com/reports/Vietnam_to_cut_coal_exports_to_China_nearly_in_half_report_999.html

BWK