Russia redirects coal rejected by EU to China and India

Export volumes of Russian coal rejected by European countries were sent to China and India in July, according to the review of experts from the Center for Energy Development (CRE).

Report informs, citing the review, that the supplies of Russian coal in July could have decreased by about 3 million tons over the month, but the fall "was mainly offset by the redirection of volumes to the East - to India and China." The study, citing data from the analytical agency Kpler, notes that coal supplies to China and India in July increased by 42% and 60%, respectively. A total of 6.7 million tons were delivered to China by sea and 2 million tons to India.

Coal is usually delivered to Asia by sea: according to the Association of Commercial Sea Ports, in 2021, coal transshipment in ports amounted to 202.7 million tons, and all coal exports, according to the Ministry of Energy, amounted to 223 million tons.

The CRE review also notes that July's discount on Russian coal is still high. According to experts, Russian coal is traded at discounts of more than $200 per ton (45–50% cheaper) regardless of direction. This discount is more than ten times higher than before the start of Russian hostilities in Ukraine.

The embargo on Russian coal was included in the fifth package of EU sanctions. The import ban came into effect in the European Union on August 1. Against the backdrop of restrictions on the supply of Russian coal, the EU countries ramped up the coal imports from Kazakhstan, with the January-May volume exceeding the figures for the whole of 2021.