Exports to the region will grind to a halt in August when a European ban on Russian coal shipments takes effect. While Europe looks to South Africa and Australia for alternative supplies, Russia has boosted sales to India, previously a low-volume, low-price market, the executives said. Turkey remains a big buyer.
Russia is one of the world’s top three coal exporters, but that’s not been enough to shield its miners from sanctions. Russian steelmakers have also been buffeted by the fallout from the war. By contrast, Russia’s dominance of palladium mining means that shipments have been less impacted, while Moscow is tightening its squeeze on gas flows to underline the dependence of European economies.
While Russian coal miners have been forced to seek out discounted markets — with Japan and South Korea also planning to stop purchases — the blow has been softened by record prices for the fuel.
In coking coal, used in steelmaking, the situation is similar. China more than doubled Russian coking coal imports in April, while Indian shipments are also picking up, ING Group said in report this month.
That greater eastward reorientation in Russia’s coal trade is also posing logistical challenges. There are decades-old bottlenecks on rail corridors heading to Asia. While coal previously had priority over other goods, now it’s competing for scarce capacity with iron and steel, the executives said.