Opinions in the domestic Chinese thermal coal market are mixed on reports in the Chinese media that Beijing is taking the initiative to encourage end user customers to buy more US coal as a way of easing trade tensions. 

According to Chinese media reports, the plan is to purchase up to $70 billion of US products including Appalachian coal from the eastern US. 

The reports said the coal industry in the US state of West Virginia has suffered from the move to renewable energy. The state was also a major supporter of Donald Trump in the November 2016 presidential election, who promised to save the US coal industry. 

China's open door to US coal imports could involve Beijing waiving tariffs for US coal, which is currently subject to a 6% import tax on the delivered cost of shipping thermal coal to China based on its CFR price. 

However, market participants in China were loath to jump to any conclusions yet. "With a severely strained relationship between the US and China, it seems unlikely that there will be tax-free imports of US thermal coal into China," a north China-based trader said. 

Another north China-based trader said he had heard more interest in Chinese buying circles for coal from US coal miners, but there were no deals concluded recently for China to his knowledge. 

"Ultimately, it is vital to take into account the long voyage [of US coal] to China and the possibility of policy changes by the Chinese government." 

"Chinese buyers must have a certain degree of risk appetite to consider importing US coal," 

he said. 

A South Korea-based trader looking into US coal imports into Asia said he had heard of talk

of China possibly buying more US thermal coal as one way of helping resolve its trade dispu

te with the US. 

He declined to comment on rumors of the Chinese government relaxing the 6% import tax f

or US coal, as he was still waiting for news of China's decision expected to be released next 

week. 

"If the government decides to lift the tax, there will be a long process of further negotiations," 

he said. "But, with Trump's way of doing things, I think it is possible." "It will be very good ne

ws  for  us  if Trump [succeeds in getting] what he wants from the Chinese government," he 

added. 

According  to  S&P  Global Platts, traded prices for US 6,000 kcal/kg NAR thermal coal on 

Thursday were around $60.50/mt FOB basis New Orleans, equivalent to about $55.45/mt 

FOB on a 5,500 kcal/kg NAR basis. 

Platts also assessed the current netback price for US thermal coal at Vancouver at $62.56/st 

FOB. 

Shipping  costs  for  delivering  US  thermal  coal  to  Japan from the Roberts Bank terminal in 

Vancouver in a Panamax ship is currently around $14.30/mt, based on Platts data.