Russia’s seaborne coal exports to Asia have been showing a downward trend in recent times, including a decrease in shipments of both thermal grades and metallurgical coal, which is utilised in steel production, Reuters reported on Tuesday.
In February, Russia’s coal exports were slightly up from January, reaching 8.48 million metric tons, according to Kpler.
However, this was after six months of decline and was 21.6 per cent lower than February 2023. Following the sanctions imposed on Russian energy exports after Moscow’s invasion of Ukraine in February 2022, Russia shifted its coal market from Europe to Asia. This led to a peak in seaborne coal exports to Asia at 14.69 million tonnes in April last year, nearly double the pre-invasion levels.
A significant part of this increase was due to Russia boosting shipments to India, the world’s second-largest coal importer, by offering steep discounts on thermal coal.
However, Russian thermal coal is finding it harder to compete on price with rival grades from Indonesia, Australia, and South Africa.
This resulted in a drop in Russia’s thermal coal exports to India to 557,935 tonnes in February, the weakest since November 2022. At the Coaltrans India conference, Russian delegates expressed difficulty in profiting from thermal coal shipments to India due to rising freight costs and competition from other suppliers.
The prices of competing fuel from other suppliers have also been moderating in recent months. For instance, Indonesian coal with an energy content of 4,200 kcal/kg ended last week at $58.17 a ton, well below the 2023 peak of $87.55 in January.
Similarly, Australian thermal coal, favoured by Indian buyers, ended last week at $95.77 a ton, slightly down from $96.66 the previous week.
