Russian Coal Exports to China Increase by 22% Because of Low Prices

China increased its imports of coal from Russia by 22% in June as Russia reduced coal prices amid Western sanctions resulting from Russia’s invasion of Ukraine. Data sourced from the General Administration of Customs showed China imported 6.12 million tons of Russian coal in June, up from about 5 million in May.

Currently the largest consumer of coal on the planet, China is also responsible for a significant amount of global carbon emissions.

Ever since Russia invaded Ukraine, western countries have passed a series of sanctions against the European country to try and deter its war efforts. Given Russia’s position as a top global energy producer, weaning themselves off of Russian energy has had wide-ranging consequences, including pushing countries that had made green energy pledges back to coal usage.

While this pushed global coal prices to record highs, Russian coal kept trading at lower prices as countries turned to alternative coal sources, including Australia, the United States, South Africa and Colombia.

China, on the other hand, has yet to condemn Russia, choosing instead to take advantage of the low prices and increase its Russian coal imports. While the heating value at 6,000 kilocalories for a ton of benchmark Newcastle coal costs around $400, a ton of Russian coal goes for about $175.

China had been sourcing a large portion of its carbon imports from Australia, but Beijing issued an unofficial ban against Australian coal after the country issued a statement calling for investigations into the origin of the coronavirus. China imported nearly $14 billion worth of coal from Australia in 2019, but the ban on Australian coal forced it to turn to other suppliers.

Even so, Chinese demand for foreign coal has dampened slightly in the wake of COVID-19 lockdowns in Beijing due to to lower domestic prices that have brought down demand. According to Bloomberg, the lockdowns have cost China at least $46 billion per month.

Customs data reveals that China reduced its imports of cheap, low-quality thermal coal from Indonesia from more than 12 million tons in May to 9.6 million tons last month. This equates to a 43% year-on-year drop. Furthermore, customs data shows that there were zero coal shipments from Australia in June.

Based on a recent report from Bloomberg, however, this may soon change. Analysts in the energy space say that China’s ban on Australian coal is hurting its steelmaking and energy segments.

Anonymous sources who preferred to keep their identity secret said that Chinese leadership was getting increasingly worried about electricity shortages and are willing to recalibrate their relationship with Australia.

As China seeks to mend its ties with Australia, other coal miners such as Warrior Met Coal Inc. (NYSE: HCC) are reaping the rewards of the ongoing energy crisis, which has seen coal prices rise to unexpected levels.

About MiningNewsWire 

MiningNewsWire (MNW) is a specialized communications platform focused on developments and opportunities in the global resources sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to nearly 2 million followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled visibility, recognition and brand awareness. MNW is where news, content and information converge.

To receive SMS text alerts from MiningNewsWire, text “BigHole” to 844-397-5787 (U.S. Mobile Phones Only)

For more information, please visit https://www.MiningNewsWire.com

Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer

MiningNewsWire
Los Angeles, California
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com

MiningNewsWire is part of the InvestorBrandNetwork.

Archives

Select A Month

Contact us: (310) 299-1717