http://online.wsj.com/article/SB120275985736359763.html?mod=todays_us_page_oneChina is doing for coal what it once did for oil: pushing prices to new highs, adding more pressure to the creaking global economy.
China has long been a huge supplier of coal to itself and the rest of the world. But in the first half of last year, it imported more than it exported for the first time, setting off a near-doubling of most coal prices around the world. The capper came in late January when a winter of punishing snowstorms and power shortages led Beijing to suspend coal exports for at least two months.
Just since then, Asian prices have shot up an additional 34%. Last week, coal benchmarks hit all-time highs in the U.S., Europe and Asia. That's adding to orries over global inflation already stoked by rising prices for everything from crude oil to cattle feed. "The velocity of the change has been remarkable," says Thomas Hoffman, senior vice president for external affairs for U.S.-based coal supplier Consol Energy Inc., which he says is considering holding off on some commitments to supply coal to see if prices rise even further.
For the world, which uses coal for about 40% of its electricity, the result is similar to what happened after China became a net importer of oil in 1993. But the Chinese factor is unfolding much faster with coal. It wasn't until China's industrial development shifted into overdrive this decade that the nation began to shake global petroleum markets. Oil's big price surge came after widespread brownouts in China in 2004 forced factories there to buy diesel fuel for backup generators, increasing the country's foreign oil demand.
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