According to the General Administration of Customs of China (GACC), in August 2022, Russian exporters enhanced coal supplies to Chinese consumers to 8.5 mio t (+3.1 mio t or +57% y-o-y; +1.1 mio t or +15% m-o-m). The volume of coal exports in August 2022 is a new 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 strong coal production and high inventories, coal prices in China continue to rise on concerns over reduced domestic supply, following the start of maintenance on the Daqin railway line amid robust coal generation growth, caused by hot weather in the central and southeastern regions of the country.
China strives to scale up coal imports to accumulate stocks and ensure that provinces do not have to impose power supply restrictions, which occurred last year, negatively affecting the manufacturing industry, services sector and households.
Russian suppliers are forced to offer significant discounts, enabling Chinese consumers to buy coal at half the global indexes. This way, Chinese steel, cement and generating companies gain a competitive advantage compared to, for example, Japan, which joined the ban on Russian material.
Total Russian coal exports to China for the 8 months of 2022 amounted to 41.3 mio t (+1.6 mio t or +4% y-o-y).
Source: CAA
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