Russia redirects coal abandoned by the EU to China and India

In July, export volumes of Russian coal from European countries, falling due to EU sanctions, were sent to China and India. In this regard, deliveries abroad remained almost unchanged by June. This is stated in the review of the experts of the Center for Energy Development (CRE), which drew attention Vedomosti.

According to the CRE, the supply of Russian coal in July could have decreased by about 3 million tons over the month, but the fall “was mainly offset by the redirection of volumes to the East – to India and China.” The study, citing data from the analytical agency Kpler, notes that coal supplies to China and India in July increased by 42% and 60%, respectively, over the month. 6.7 million tons were delivered to China by sea, and 2 million tons to India.

Coal to Asia is usually delivered by sea: according to the Association of Commercial Sea Ports, in 2021, coal transshipment in ports amounted to 202.7 million tons, and all coal exports, according to the Ministry of Energy, amounted to 223 million tons.

The CRE review also notes that the discount on Russian coal in July is still high. According to experts, Russian coal, regardless of direction, is traded at discounts of more than $200 per ton (that is, 45-50% cheaper). This discount is more than ten times higher than before the start of Russia’s military operation in Ukraine.

The embargo on Russian coal was included in the fifth package of EU sanctions. The import ban came into effect in the European Union on 1 August. Against the backdrop of restrictions on the supply of Russian coal to EU countries increased coal imports from Kazakhstan: in January-May, this volume exceeded the figures for the entire 2021.

On the situation with the export of coal to India – in the material “Kommersant” “Russian coal is being developed in India”.

Anastasia Larina