Despite international sanctions, North Korea is continuing to earn foreign currency by exporting coal. The country’s authorities have reportedly been pushing coal exports with greater enthusiasm as of late, even with North Korean coal fetching bare bottom prices due to the collapse of international coal prices.
According to a source in China on Friday, Chinese traders are paying North Korea an average of USD 50 a ton for smuggled coal.
Though North Korea was getting USD 100 a ton from China as recently as August, the price halved over the course of September.
Not only have world coal prices fallen, but with contraband exports of North Korean coal to China rising, prices of North Korean coal have fallen, too.
In fact, with North Korea trying to smuggle more and more coal to China, Chinese traders are sometimes even unilaterally lowering prices.
A source in North Pyongan Province said some companies are even selling coal to China for USD 40 a ton, depending on the circumstances.
Nevertheless, the source told Daily NK that because coal is North Korea’s biggest foreign currency earner – and because China is practically the only buyer – North Korea is trying to sell as much coal as possible to China at prices set by the Chinese side, even if those prices are low.
According to data from Bloomberg Terminal, relatively cheap Indonesian coal was selling for USD 331 a ton as of Oct. 31. Compared to this, North Korea is selling its coal to China at roughly one sixth the price. Moreover, North Korea is smuggling high-quality, NAR 6,000 kcal/kg coal.
RISING COAL PRICES INSIDE N. KOREA
Inside North Korea, coal prices are rising due to low supply, according to a source in North Pyongan Province. The source said that a ton of coal was selling for USD 40–50 in Sinuiju as of Oct. 25. The domestic price of coal has risen so much that it roughly equals the export price.
The domestic coal price is usually cheaper than the export price, but with little coal in domestic circulation and demand rising for the winter, the local price has risen to the export price.
The source said with domestic coal selling for more than USD 35 a ton at the point of production, the price climbs the further one goes from the mines.
If coal for export were diverted to domestic use, North Koreans would be able to purchase coal for slightly lower prices, but North Korea is having a tougher time earning foreign currency.
Now, with December approaching, North Korean trading companies must export as much coal as possible to China — and quickly — to meet their foreign currency quotas ahead of year-end reviews.
Another source in North Korea said in the past, you could buy coal for USD 10 a ton when prices were low, but now prices are USD 30 to 40 higher.
“It looks like preparing for winter will be tough, so I worry,” she said.
Please direct any comments or questions about this article to dailynkenglish@uni-media.net.
