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The main coal exporters from Russia are SUEK, Kuzbassrazrezugol, Sibantracite, Elgaugol, SDS–ugol, Kuzbass Fuel Company, Kolmar, Russian Coal, Raspadskaya, Mechel. 

After the introduction of commodity sanctions and currency restrictions, China, India and Turkey became the main consumers of Russia's fuel and energy sector products. For example, in January 2022, China bought Russian fuel and energy products for $5.5 billion, and in June 2023 — for $8.45 billion, the cost of supplies to India increased from $0.65 billion to $4.32 billion over the same periods.

By the end of 2022, China remained the main export market for Russian coal. 47 million tons of energy (+5% year-on-year) and 21.1 million tons of metallurgical (+127%) coal were delivered there. Against the background of the geopolitical situation and sanctions, direct supplies to the EU and Japan stopped or significantly decreased, while India took the second place in terms of imports of metallurgical coal from Russia (9.3 million tons, +144%).

As a result, the list of the largest importers of Russian coal (for the first half of 2023) included China (46%), India (19%), South Korea (12%), oil — China (51%), India (36%), EU countries (8%), LNG — EU countries (53%), China (20%) and Japan (15%). Turkey (50%) and EU countries (42%) became major importers of liquefied petroleum gas, Turkey (24%), China (12%), Saudi Arabia (10%), pipeline gas — EU countries (43%), Turkey (27%) and China (21%).

Yesterday it became known that the geography of Russian coal exports will undergo significant changes by 2030. According to experts, India will become the key importer instead of China.

Demand for Russian coal abroad will grow by 38% by 2030 compared to last year and reach 293.9 million tons. This forecast is given by analysts at the Institute of Natural Monopoly Problems (IPEM) in an April study reviewed by Vedomosti. 

In absolute terms, the demand for Russian coal will grow the most in the countries of Southeast and South Asia - up to 210.1 million tons (+15.5%). According to IPEM estimates, more than 70% of all coal exported from Russia will be supplied to the markets of these regions by 2030.

Demand for the products of Russian coal miners in North and South America will also grow significantly – by 7.6 times to 3.8 million tons per year, in neighboring countries – by 3.2 times to 4.2 million tons, as well as in the Middle East – by 6% to 29.3 million tons and Africa – almost twice to 2.1 million tons. According to IPEM forecasts, about 1.2 million tons of coal per year from Russia will also be supplied to European countries in 2030 (to which countries, it is not specified). For comparison: in the pre-crisis year 2021, the European Union bought 48.8 million tons of coal in Russia.

Russia’s Coal Export   in million tons

Year	2017	2018	2019	2020	2021	2022	2023
Volume	186,3	193,2	193,4	211,0	223,4	221,2	212,5

Source: MinEnergo

Deputy Energy Minister Sergei Mochalnikov, in an April interview with Vedomosti, estimated the potential for coal exports from Russia by 2030 at 360 million tons per year (see the publication dated April 22). The official clarified that by this time, the railway's transport capacity in the North-West of the country should grow from 150 million to 220 million tons per year, in the direction of the ports of the Azov-Black Sea basin (ACHB) – from 125 million to 152 million tons.

A representative of Russian Railways confirmed these targets. He also recalled that in April 2024, the Russian government approved the passport of the third stage of development of the Eastern Polygon (BAM and Transsib), which involves investments worth more than 3.7 trillion rubles. In 2030, the capacity of the Eastern landfill will reach 210 million tons, in 2032 - 270 million tons. The interlocutor also noted that Russian Railways “are actively working to modernize the infrastructure for the export of all goods presented.” At the same time, according to him, the southern direction in 2024 it remains underloaded: the volume of coal transportation on it “for market reasons” is significantly behind last year's figures (-75% April to April 2023).

In 2023, coal exports from Russia, according to the Ministry of Energy, amounted to 212.5 million tons, decreasing by 3.9% by 2022. 175 million tons were exported to the Asia-Pacific countries, i.e. they accounted for 83% of exports. Coal production in Russia in 2023 amounted to 438.7 million tons (-1.1% by 2022).

A representative of SUEK told Vedomosti that the company "agrees with the forecast of a significant potential for increasing exports, especially to Asian countries." Other large coal companies and the Ministry of Energy did not provide comments.

Official data on coal exports from Russia in January – April 2024 have not yet been published. According to the Center for Price Indices (CCI), in January – March, coal exports decreased by 13% compared to the first quarter of last year to 45.2 million tons. At the same time, as Kommersant reported with reference to Russian Railways documents, in 2024 the company will not be able to export even those volumes that are fixed in agreements with coal-mining regions (Kuzbass, Buryatia, Khakassia, Tuva, Yakutia and the Irkutsk region).

The deteriorating market situation is also an obstacle to a serious increase in coal exports: export prices for Russian energy coal in early April fell to the lowest since 2021. According to the CCI, the price of fuel with a caloric content of 6000 kcal per 1 kg on the FOB basis ("with loading on the ship") The Far East was $95/ton (-6% since the beginning of the year). In Taman, coal of the same caloric content cost $72/ton (-13%), in the ports of the Baltic Sea – $61/ton (-14%).

Nikolay Dudchenko, an analyst at Finam, notes that estimates of the prospects for Russian coal exports differ greatly from different experts. At the same time, in 2024, the situation with coal exports, according to him, looks "quite difficult." At the current dynamics, the volume of exports by the end of the year may not exceed 190-200 million tons, he expects.

IPEM's assessment of the growth in demand for Russian coal until 2030, according to Dudchenko, looks more realistic than the assessment of the Ministry of Energy. But in order to increase exports even to 293.9 million tons, it is necessary to "carry out comprehensive work," the analyst believes. This is primarily a solution to problems with Russian Railways tariffs for coal transportation and the growth of railway capacity. Starting from December 1, 2023, rail freight tariffs were indexed by 10.75%, and by the end of 2024. Discounts (reducing coefficients) for coal transportation have been suspended – 0.4 for the range and 0.9 for energy coal exports. Dudchenko also points to the need for negotiations with China on the abolition of trade duties, which the PRC has returned since January 2024.

Kirill Rodionov, an energy expert, objects: "Only the development of railway infrastructure will not solve the long-term problems of the coal industry." In his opinion, the demand for Russian thermal coal will be limited due to the narrowing of the geography of construction of new coal-fired thermal power plants and increased investment in coal mining in China.

The analyst cites data from the International Energy Agency, according to which investments in coal mining in China in 2018-2023 increased almost twice – from $55 billion to $105 billion. At the same time, in the global capacity structure of coal-fired thermal power plants, China accounted for 53% (1,137 GW out of 2,130 GW) at the beginning of 2024, and for power plants under construction this share was 71% (140 GW out of 197 GW).

According to Rodionov, competition in the global market of coking (metallurgical) coal will also become tougher. For example, Mongolia will actively compete with Russia for the Chinese market, he notes. These risks cannot be mitigated either by modernizing the BAM and Transsib, or by maintaining low rates for coal transportation by rail, the expert concludes.

Source: https://www.vedomosti.ru/business/articles/2024/05/08/1036077-analitiki-prognoziruyut-rost-sprosa-na-rossiiskii-ugol?utm_campaign=newspaper_8_5_2024&utm_medium=email&utm_source=vedomosti