N. Korean ships head home with coal rejected by China

SHANGHAI • A fleet of North Korean cargo ships is heading home to the port of Nampo, the majority fully laden, after China ordered its trading firms to return coal from the country, shipping data shows.

After repeated missile tests by North Korea that drew international criticism, China banned all imports of coal from the country on Feb 26, cutting off its most important export product.

China's Customs department issued an official order last Friday telling trading firms to return their North Korean coal cargoes, said three trading sources. US President Donald Trump and visiting Chinese President Xi Jinping were discussing North Korea on the same day.

Shipping data on Thomson Reuters Eikon, a financial information and analytics platform, shows a dozen cargo ships on their way to North Korea's main west coast port of Nampo, almost all carrying cargoes from China. The Chinese authorities did not respond to requests for official comment.

But US Secretary of State Rex Tillerson has said last week's US military strike against Syria over its alleged use of chemical weapons was a warning to other countries, including North Korea, that "a response is likely" if they pose a danger.

A source at Dandong Chengtai, one of China's biggest buyers of North Korean coal, said the company had 600,000 tonnes of North Korean coal sitting at various ports, and a total of 2 million tonnes were stranded at Chinese ports.

Eikon data shows most of these ships have recently left Chinese coal ports, including Weihai and Peng Lai, returning to North Korea full or mostly filled with cargo.

North Korea is a significant supplier of coal to China, especially of the type used for steel making, known as coking coal. To make up for the shortfall from North Korea, China has ramped up imports from the United States in an unexpected boon for Mr Trump, who has declared he wants to revive his country's struggling coal sector.

Eikon data shows no US coking coal was exported to China between late 2014 and 2016, but shipments had soared to more than 400,000 tonnes by late February.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 12, 2017, with the headline 'N. Korean ships head home with coal rejected by China'. Print Edition | Subscribe