According to the General Administration of Customs of China (GACC), in July 2022, Russian exporters boosted coal supplies to Chinese consumers to 7.4 mio t (+1.3 mio t or +21% m-o-m; +0.9 mio t or +14%y-o-y). The volume of coal exports in July 2022 is an all-time monthly high for the five years, since records were started in 2017.
With international sanctions on Russian coal exports and EU embargo on all Russian coal shipments to Europe starting from August 2022, Russian suppliers are trying to increase supplies to Asia, including China, India and other countries of the Asia-Pacific.
Despite China’s growing coal production and high inventories, extreme heat in the central and southeastern regions of the country as well as heavy rains in the northern regions and the recent outbreak of coronavirus in some mining regions, that has started to negatively affect coal extraction volumes, could support coal imports, primarily from Russia. Russian suppliers are forced to offer significant discounts, allowing Chinese consumers to buy coal at half the price of global indices, giving a competitive advantage to Chinese steel, cement and generating companies compared to, for example, Japan, which joined the ban on Russian material.