These Asian countries – the world’s foreign coal importers – are facing energy shortages, and Russian coal, which is sold at a deep discount to European prices, has come in handy, especially now that gas and crude oil-consuming coal prices are very dangerous.
However, given the latest trends, the process is creaking.
Trade flows in the coal market have changed since Russia launched a military blitz in Ukraine and Western countries imposed a ban on Russian energy imports. Russia turned to the East, and Europe went for coal to other suppliers, such as South Africa, Australia and Colombia.
Europe is looking for coal
In addition, Russia has significantly reduced Europe’s gas reserves, forcing EU countries to switch to coal – temporarily, they say – to save some gas for the winter. According to German Economy Minister Robert Habek, Germany will use coal to generate electricity to fill gas storage facilities.
Neighboring Austria is set to convert a back-up gas-fired power plant to run on coal, while the Netherlands is set to ease its current restrictions on coal-fired power plants.
With this demand for coal in Europe is growing, especially with the import ban going into effect next month.
At the beginning, as part of the fifth package of meetings, the EU introduced a ban on the import of coal and other solid fossil fuels from Russia. He slows down. The package includes a ban on the purchase, import or transportation of coal and other solid fossil fuels produced in Russia or exported from Russia to the EU.
Russia is looking for buyers
As Europe seeks elections in other parts of the world, coal buyers in Asia, including China and India, are ramping up imports from Russia. This is evidenced by data from Kpler.
In June, Russia exported 16.45 million tons of coal by sea, in May – 16.56 million tons. This is 3.5% and 3.8% higher than in June and May last year, respectively.
Chinese coal imports from Russia remain consistently high, and India has significantly increased its purchases in recent months. According to Russell, Russia’s share of Indian coal imports remains low. Last month it was 4.4%.
Meanwhile, the EU, South Korea and Japan in recent months have seaborne coal imports from Russia. In early June, Russian coal exports to Europe fell to 10-15% of the total, compared with 30% before the conflict. Bloomberg writes about this, citing reports about Russian coal corporations.
Russian coal supplies to Europe will end in August, which means regions are consuming more resources in South Africa, Colombia and Australia to feed coal-fired power plants, which should help save even more scarce gas.
The EU has already increased imports of South African coal. In January-May 2022, purchases from South Africa’s main coal hub are up 40% compared to all of 2021.
“Many importers are currently either unwilling or unwilling to import coal from Russia, so they have to look elsewhere,” Toby Hassall, lead coal market research analyst at Refinitiv Commodities Research, said last month.
Meanwhile, Russian coal, like Russian coal, finds hunting buyers in China and India, who buy oil at a big discount and are profitable for themselves.
Prepared by Profinance.ru by materials OilPrice resource
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