The International Energy Agency (IEA) expects that the production of thermal and metallurgical coal in Russia and its exports to continue declining in 2025-2027. According to the forecast, the negative trend will persist until market conditions improve and government support measures are put in place.
The IEA estimates that coal production in Russia in 2024 will decline by 3% year-on-year to 427 mio t. However, the forecast does not take into account the fact that output in Kuzbass, the main coal mining region of the country, where high-quality coal is produced, is falling significantly, while production growth is mainly driven by non-premium grades. In 2024, coal extraction in Kuzbass is set to drop to 196 mio t (-18.2 mio t or -8.4% y-o-y), and exports are expected to fall to 100 mio t (-13.8 mio t or -12.1% y-o-y).
The IEA also expects total Russian coal exports to decline by 6% to 199 mio t. However, according to preliminary data, this figure will fall by 8.1% to 196 mio t (-16.0 mio t or -7.5% vs. 2023).
In 2025, the IEA forecasts the production to shrink by 3% to 416 mio t, and exports by 7% to 185 mio t. In 2026, the production is estimated at 416 mio t, with exports at 180 mio t. In 2027, output may reach 412 mio t (305 mio t of steam coal, 106 mio t of metallurgical coal), exports – 178 mio t. The downfall in production over 3 years compared to 2024 would total 3.5%, exports – 10.6%.
Therefore, export supplies of high-quality Russian coal, including PCI, will keep contracting in the coming years.
The negative forecast is attributed to difficulties with coal exports due to anti-Russian sanctions, as well as high transportation costs, logistics issues and low profitability of supplies abroad resulting from discounts to global market benchmarks.
Source: CCA Analysis
