- China’s coal imports from Russia fall 16% y-o-y in Mar
- Currency volatility, cautious buying pressure exports
Mysteel Global: Russian thermal coal exports to China have faced rising headwinds in recent times, as Chinese customs authorities have intensified trace element inspections on imported coal cargoes, increasing the risk of delivery delays or even rejections. Other factors, such as tepid demand, the volatility of the yuan, and elevated costs, have also affected Russian shipments to China, according to sources.
In March, China’s thermal coal imports from Russia totalled 2.67 million tonnes (mnt), down sharply by 15.9% y-o-y despite an 8.2% rise from February, the latest data from the General Administration of Customs of China showed. China’s thermal coal intakes from Russia in the first quarter slumped by 14.3% y-o-y to 7.61 mnt.
Notably, it is learnt that certain Russian coal cargoes were found with excessive fluorine content, though the handling of these cargoes remains unclear. Sources noted high-calorific value cargoes such as 5,500 kcal/kg and 6,000 kcal/kg NAR were primarily exposed.
However, certain market participants believe that the recent decline in Russian coal arrivals is driven more by tepid demand than by the stricter quality checks.
As of Friday, Russian 5,500 kcal/kg NAR thermal coal was assessed by Mysteel at $77/t CFR China, unchanged from Thursday but down $1/t from a week earlier. The price, which can be translated to around RMB 700/t CIF ports along the Yangtze River, with 13% VAT included, has stayed unchanged since 8 April.
“Russian coal has a moderate price advantage against domestic material,” a South China-based trader said. “Russian 5,500 kcal/kg NAR can fetch RMB 690/t if there is real buying interest.”
According to Mysteel’s assessment, Chinese 5,500 kcal/kg NAR coal was priced at RMB 715/t FOB Yangtze River ports, with VAT, which was stable from a day earlier.
Despite the competitive pricing, Chinese buyers have taken a cautious stance about buying Russian coal due to the seasonally weak demand and volatility of the Chinese yuan against the dollar, sources noted. On the other side, Russian suppliers were equally reluctant to offer deeper discounts because of the elevated costs.
“Russian coal miners might continue to reduce shipments to China, as they could hardly make ends meet,” another South China-based trader said.
Beijing and Moscow will continue to expand energy cooperation, including coal and natural gas, according to a meeting held in Beijing on Thursday between the Russian Energy Minister Tsivilyov and Chinese Vice Premier Ding Xuexiang. Discussions reportedly included measures to facilitate Russian energy exports to China.
Elsewhere, Indonesian 3,800 kcal/kg NAR coal was not traded much during the Great Friday holiday, with prices almost unchanged from a day earlier. Offers for this grade softened last week, to around $48-52/t FOB Kalimantan from $50-52/t a week earlier.
A deal for May-loading Panamax cargoes of this grade was reportedly sealed at $48.5/t FOB on Thursday, traders said.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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