US thermal coal and liquefied natural gas (LNG) exports to China have surged in the past few months, according to a report form the US-China Economic and Security Review Commission.

Two factors have contributed to the surge: high Asian prices for coal made US coal cost competitive and low Asian LNG prices have encouraged Chinese buyers to purchase more LNG to diversify China’s coal-dominated energy mix.

The United States has exported $233 million of coal and $139 million of LNG to China in the first seven months of 2017. These amounts already surpassed the 2016 total exports by 87 percent for coal ($125 million) and two percent for LNG ($137 million).

The spike in US coal and LNG exports indicates a sustained recovery since 2016 in US coal exports to China, and a robust demand for US LNG from China. US coal exports to China suffered a huge decline from its peak in 2012 and reached a bottom in 2015. US global coal exports rose more in the first seven months of 2017 than during any other period in the last two years, driven by demand from Asian markets.

A temporary rise in Asian thermal coal prices and recent growth in demand from Asian markets made shipping US coal to Asia profitable.

In contrast, Asian LNG prices are their lowest in more than a decade, making the cost premium of purchasing LNG instead of coal the lowest since 2000. Coupled with low US transport costs to Asia, these favorable conditions increased Asia’s demand for LNG, boosting US exports.

Other factors affecting the recent surge include China’s ongoing efforts to combat pollution. From May to October 2017, China required utilities to reduce coal imports, banned coal imports from small ports, suspended operations at two large coal mines, began pressuring local officials to reduce carbon emissions, pledged to shutdown thousands of coal-fired boilers, banned sales, transport and use of coal by most companies and power plants, and is in the process of expanding gas infrastructure for the coming winter.

Natural gas plays a small but growing role in China’s energy sector. According to China’s National

Bureau of Statistics, China’s natural gas consumption and production have both increased steadily over the past decade, with a supply gap widening substantially since 2009. In the first half of 2017, natural gas consumption soared 15 percent year-on-year to 115 billion cubic meters. This growing demand has been met through imports via pipelines and import terminals; in particular, LNG imports are growing rapidly, reaching 26.2 million tons in 2016.

According to the report Beijing’s policies offer opportunities for the United States to boost both coal and LNG exports to China. But several factors continue to affect US coal and LNG exports to China. In the coal sector, United States faces intense competition from countries that have significantly lower production and freight costs.

In the gas sector, United States currently only sells LNG to China indirectly via third-party short-term spot trades, while many US competitors, such as Australia and Qatar, already have long-term LNG contracts with China.

In May United States and China agreed to allow Chinese buyers to secure long-term contracts and purchase LNG supplies from the United States directly as part of the US-China 100-Day Action Plan.

However, only one company—Cheniere—is currently able to export large cargoes of LNG from the continental US, and five export terminals under construction are not expected to open until 2020.

But as long as LNG prices remain low and demand keeps growing in Asia, the report concluded, US LNG exports could become increasingly attractive for Asian markets seeking to diversify their LNG sources.