China’s suspension of seaborne coking coal imports from North Korea would be positive for the dry bulk shipping market as more coking coal would have to be sourced from further afield.

On 18 February, China’s Ministry of Commerce announced that the country will suspend North Korean coal imports through year-end, to penalise Pyongyang for the latter’s 12 February missile test.

Speaking to Fairplay, Jeffrey Landsberg, president of dry bulk consultancy Commodore Research, noted that China imported approximately 23 million tonnes of coking coal from North Korea in 2016. This amount would work out to roughly 766 shipments on Handysize bulk carriers.

Landsberg said: “The ban on coking coal imports from North Korea is positive for the dry bulk shipping market. Commodore now expects China to import more coking coal from several countries, including Australia, Russia and Canada.

Coking coal, along with iron ore, are the key ingredients of the production of crude steel.

Besides seaborne imports, China also imports coking coal from Mongolia via rail and truck across the Gobi Desert.

Coking coal is North Korea’s single biggest export item and source of income, while China is the isolated nation’s largest ally.

While the official announcement stated that China wanted to comply with the UN Security Council’s latest resolution to penalise Pyongyang for its missile test, observers believe that the East Asian power is also retaliating against North Korea for reportedly ordering the assassination of Kim Jong-nam.

Kim Jong-nam, the estranged older half-brother of North Korean leader Kim Jong-un, died after being reportedly accosted and sprayed or injected with a toxic chemical by two women in Kuala Lumpur International Airport on 13 February.

The older Kim had close ties to China and was reportedly under Beijing’s protection.