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China’s Imports of Russian Coal Hit Five-Year High in July

Some Chinese traders expect more Russian coal to flow into China in the fourth quarter when utilities in the northern region build stocks for the winter heating season.


Coal is lifted by cranes from a cargo ship onto a truck at a port in Lianyungang, Jiangsu province, July 26, 2018. Photo: Reuters.

 

China’s imports of cheap Russian coal surged 14% in July from a year earlier to the highest level in at least five years.

China bought 7.42 million tonnes of Russian coal last month even as Western countries shunned the nation because of its invasion of Ukraine, according to data from the General Administration of Customs on Saturday. That was the highest monthly figure since comparable statistics began in 2017, up from 6.12 million tonnes in June and 6.49 million tonnes in July 2021.

Western countries were avoiding cargoes from Russia ahead of a European Union ban on Russian coal that came into force on August 11, aimed at reducing the Kremlin’s energy revenue over its war in Ukraine.

 

ALSO SEE: Indian Firms Using UAE, Asian Currencies to Buy Russian Coal

 

Steep Discount

The ban has forced Russia to target buyers such as China and India and sell at a steep discount.

Russian thermal coal with a heating value of 5,500 kilocalories (kcal) traded around $150 a tonne on a cost-and-freight basis in late July, while coal of the same quality at Australia’s Newcastle port was assessed at more than $210 a tonne on a free-on-board (FOB) basis.

Some Chinese traders expect more Russian coal to flow into China in the fourth quarter when utilities in northern China build stocks for the winter heating season.

July shipments of Indonesian coal, mostly cheap, low-quality thermal coal with a heating value below 3,800 kcal, were 11.7 million tonnes. That was up 22% from June but down 40% from a year earlier. China has reduced its overall coal imports in recent months amid surging domestic output.

Power plants in southern China have increased tenders to buy Indonesian coal in August as it is cheaper than domestic coal, while demand for coal-fired power generation has been boosted by a record heatwave.

Indonesian thermal coal with a heating value at 3,800 kcal changed hand at about $78 a tonne on a FOB basis last week, which would still below about 690 yuan ($101) for local coal when considering shipping costs.

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

 

  • Reuters with additional editing by Jim Pollard

 

ALSO SEE:

 

India’s HDFC Bank Aided Yuan Trade in Russian Coal

 

India Cement Maker Pays For $26m Russian Coal Cargo in Yuan

 

US Says Five Chinese Companies Support Russia’s Military

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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