Last week, the U.S. included several more major Russian coal companies in the sanctions list: Kuzbassrazrezugol (KRU) and Russian Coal. Considering last year’s restrictions against a number of legal entities, including SUEK, Elgaugol, Sibanthracite and Mechel, almost all major Russian coal companies are currently under sanctions.
Rail shipments of Russian coal for export in 2024 dropped to 178.1 mio t (-18.0 mio t or -9.2% y-o-y). In 2024, U.S. sanctions covered more than 50% of the export volume, resulting in an aggressive decline in Russian coal exports. Taking into account the new restrictions, almost 80% of Russian exports are now under the sanctions, meaning a further reduction in supplies in 2025.
Blocking sanctions against Russian coal companies lead to imbalance in global supply and demand for high-quality coal, both thermal and metallurgical, including PCI and anthracite. The lost volumes of high-quality Russian coal and metallurgical material will not be replaced in the market, as production from Indonesia, South Africa and Colombia is not comparable in quality, while there is limited capacity to boost production in Australia. So, this may push up key indices, calculated on the basis of 6,000 kcal/kg material, as well as prices for coking coal, PCI and anthracite.
The limited throughput capacity of the BAM and Trans-Siberian Railway hinders the growth of transshipment volumes in Far Eastern ports, where logistics is most favorable for shipments to Asia-Pacific markets due to lower freight rates.
The mix of current low prices with high rail transportation costs and handling rates in ports makes export supplies unprofitable, forcing Russian coal companies to suspend export deliveries, reduce production and, in some cases, shut down mining facilities and curtail projects at new coal deposits.
Coal output in Kuzbass, the main coal mining region of Russia, where high-quality material is produced, fell to 198.6 mio t in 2024 (-15.2 mio t or -7.1% y-o-y).
Source: CCA Analysis
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