Russian coal imports to China hit 5-year high in July as West avoids Moscow

Last month, China imported 7.42 million tons of coal from Russia, according to data from the General Administration of Customs on Saturday. This was the highest monthly figure since benchmarking began in 2017, up from 6.12 million metric tons in June and 6.49 million metric tons in July 2021.

Western countries shunned supplies from Russia ahead of the European Union’s ban on Russian coal, which went into effect Aug. 11 and was intended to cut the Kremlin’s energy revenues in the wake of its February invasion.

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

Russian steam coal with a heating value of 5,500 kilocalories (kcal) was worth about $150 per metric ton at the end of July on a cost and freight basis, while coal of the same quality in the Australian port of Newcastle was valued at more than $210 per metric ton. on a franchise basis (FOB).

Some Chinese traders expect more Russian coal to enter China in the fourth quarter as utilities in northern China build up supplies for the winter heating season.

July shipments of Indonesian coal, mostly cheap, low-quality thermal coal with a calorific value below 3,800 kcal, amounted to 11.7 million tons. This is 22% more than in June, but 40% less than a year earlier. In recent months, China has reduced its total coal imports amid rising domestic production.

Power stations in southern China increased tenders to buy Indonesian coal in August as it is cheaper than domestic coal, while demand for coal-fired power increased due to record heat.

Indonesian thermal coal, with a calorific value of 3,800 kcal, changed hands last week at about $78 per metric ton FOB, still below about 690 yuan (about $100) for local coal including shipping costs.

Chinese customs data showed zero shipments of coal from Australia in July.

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