With China on the hunt for coal amid energy shortages, a growing number of Chinese traders are reportedly asking for North Korean coal. It appears North Korean coal exports will increase for the time being with the Chinese government looking the other way.

According to a source in Pyongyang on Wednesday, there have been noticeably more requests for coal from Chinese traders since North Korea’s national foundation day holiday on Sept. 9. He said there have been several illegal transshipments of coal for export over the last month.

China has recently limited trade with private North Korean traders, dealing instead with official North Korean trading bodies. The source said, however, that Beijing now approves transactions with any North Korean entity that can provide China with coal, including private ones.

In fact, the Chinese government has reportedly launched no particular crackdowns on private imports of North Korean coal.

Rather, according to a source in China, some provincial civil servants in China are advising traders to take care not to get photographed when they transship coal. Essentially, the Chinese government is turning a blind eye to imports of North Korean coal, an internationally sanctioned item. At the same time, they are asking traders to exercise caution, aware that the international community is watching.

Kumya Youth Coal Mine in South Hamgyong Province. / Image: Yonhap News Agency

Skyrocketing coal prices are fueling the Chinese traders’ aggressive demands for North Korean coal.

According to the Zhengzhou Commodity Exchange, the futures price for coal on Sep. 2 was USD 216 a ton, a record high. The Newcastle Coal futures price, the global benchmark, was USD 240 a ton on Sept. 4, nearly triple the price at the beginning of the year.

Meanwhile, the price of North Korean coal has yet to reach even half the international price. This has Chinese traders busy dealing with North Korean counterparts able to provide them with coal.

However, with North Korea trying to raise coal prices and China trying to keep prices low due to international sanctions, it sometimes takes time to work out prices

“As Chinese demand for coal grows, North Korea is jacking up its price more than 30 or 50%. So it’s taking time to work out the prices,” said the source in China. “With demand on the increase, it appears the price [of North Korean coal] will rise, too.

North Korean authorities appear to be reacting to the situation by accelerating coal mining efforts.

In a speech on the second day of the Fifth Meeting of the 14th Supreme People’s Assembly on Sep. 29, North Korean leader Kim Jong Un called for state investment in electricity and coal and strengthening the country’s material and technological base to “provide not only for the demands of the people’s economy, but also prospective demand.” 

This suggests a call to expand coal mining, taking into account not only local demand but international demand as well.

Please direct any comments or questions about this article to dailynkenglish@uni-media.net.

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Seulkee Jang
Seulkee Jang is one of Daily NK's full-time reporters and covers North Korean economic and diplomatic issues, including workers dispatched abroad. Jang has a M.A. in Sociology from University of North Korean Studies and a B.A. in Sociology from Yonsei University. She can be reached at skjang(at)uni-media.net.