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China’s imports of Russian coal rise 22pc due to cheaper cargoes

SINGAPORE: China’s coal imports from Russia rose 22% in June from a month ago despite a decline in its total coal purchases, as traders were drawn to discounted cargoes following western sanctions on Moscow over the war in Ukraine.

The world’s biggest consumer of the fossil fuel brought in 6.12 million tonnes of coal from Russia last month, data from the General Administration of Customs showed on Wednesday.

That compares with 5.01 million tonnes in May and 5.24 million tonnes in June 2021.

China has been increasing coal imports from Russia since March, when global coal prices soared to record highs but Russian cargoes were traded at steep discounts as western allies weaned themselves away from doing business with Moscow after Russia attacked Ukraine.

Beijing has refused to condemn Russia’s attack on Ukraine, which the Kremlin has called a “special operation”.

Prices for Russian coal with heating value at 6,000 kilocalories stand at around $173-$176 a tonne, compared to more than $400 a tonne for benchmark Newcastle coal.

However, China’s appetite for imported coal – even Russian cargoes – has been curbed by lower domestic prices due to Beijing’s COVID-19 lockdowns that have driven down demand.

Arrivals of Indonesian coal, mostly cheap and low-quality thermal coal with heating value below 3,800 kcal, were 9.6 million tonnes in June, down from 12.4 million tonnes in May and down 43.5% from a year ago, customs data showed.

China’s customs data showed zero coal shipment from Australia in June.

Shares of Australian coal miners have jumped after talk of China ending its unofficial ban on imports of Australian coal, in place since October 2020, intensified.

Meanwhile, China’s coal exports, mainly anthracite, reached 517,842 tonnes, the highest level since March 2020, as traders sought to profit from widening spreads between domestic and international prices.

Prices of Chinese coal with 5,500 kcal are capped by Beijing at around 1,200 yuan ($177.93) a tonne.

China’s imports of Russian coal rise 22pc due to cheaper cargoes

Source: Brecorder

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