- K10, Inagli, K4 exports decline, Elga, GJ stable
- Payment hurdles, domestic supply glut hit sales
Mysteel Global: Russia’s coking coal sales to its largest overseas market, China, have experienced some clear alterations in the past several months of this year, driven mainly by shifted selling channels of Russian miners, more payment hurdles for trading, and rising price sensitivity among Chinese buyers.
Deliveries of Russian K10 lean coal – a grade used for blending in coke ovens – to China had come to a halt after a vessel of cargoes arrived in May, as the miner declared force majeure. Sources informed that it remains unclear when the shipments could be resumed, although some predicted the timing could be September.
The year-to-date arrivals of K10 grade at major Chinese ports tumbled 28% from a year earlier to 546,000 tonnes, Mysteel’s tracking data showed. The cumulative arrivals for the full year of 2024 were recorded at 1.39 million tonnes (mnt).
Besides, Russian miners had basically stopped offering Inagli fat coal and K4 primary coking coal — the major coal varieties bound to China — after the Chinese New Year holidays ended in early February, sources shared.
Increasing hurdles in Russia’s cross-border payments in US dollars caused by Western sanctions on Russia have mainly contributed to this change, with these companies pivoting away from the Chinese market to some Southeast Asian nations.
Meanwhile, a bearish outlook on China’s coking coal market, reflected in sluggish replenishment from end-users and a growing glut in its domestic coal supply, are factors that have also played a part in these miners’ adjustment of their selling strategies.
There are signs that Inagli fat coal shipments to China are recovering slowly, with three vessels of this grade reportedly arriving so far this month, but sources cautioned that it remains to be seen whether this trend will be sustained. There are still no quotations for the K4 variety so far.
However, supplies of Elga fat coal and GJ 1/3 coking coal to China have maintained steady flows over the past six months, thanks to efforts made by their respective developers – Elga Coal Company and EVRZA Company – to secure market share in China.
According to Mysteel’s survey, arrivals of GJ coal to major Chinese ports averaged 180,000 tonnes per month so far this year. Apart from ports in North China’s Hebei and East China’s Shandong provinces, EVRZA is looking to expand its reach to northeastern, central and southern China ports as well, sources disclosed.
Elga Coal has stepped up to sign long-term supply contracts this year, eyeing a bigger market share in China. The miner’s monthly average term contract volume with Chinese coking coal buyers has exceeded 1 million tonnes this year, Mysteel learned.
Meanwhile, the price convergence between Russian miners’ FOB offers and Chinese traders’ spot offers has intensified this year, Mysteel observes. The main reason is that Chinese traders continued bidding aggressively for forward cargoes so as to keep their cargoes competitive considering the generally weak domestic coking coal prices and heightened price sensitivity among buyers, Mysteel learned.
As of 17 July, Russian Elga fat coal was assessed by Mysteel at RMB 915/tonne ($127.5/t), slumping by 31.2% from the year-ago level, while GJ 1/3 coking coal also plummeting by 37% to RMB 910/t, both on an exw basis at North China’s Caofeidian Port, with VAT included.
China’s imports of major Russian coking coal grades will likely grow mildly in the second half of 2025, Mysteel’s analyst predicts.
In the first five months, China’s coking coal imports from Russia totalled 12.48 mnt, rising by around 2% from a year earlier. The volume accounts for 28.5% of China’s total intakes of the commodity, up from a 26% share recorded in the same period last year, according to data from China’s General Administration of Customs.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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