Russia is now looking at expanding its coal exports to the Asian market, said Deepak Kannan, Global Head of Coal Pricing, S&P Global Commodity Insights, on Monday as Europe taps other markets for its coal exports.
Kannan explained that the coal trade flows have changed drastically since the war between Russia and Ukraine broke out last year.
“As Europe stopped coal imports from Russia, it was cut short of fuel and had no gas supplies. There was a shift in demand for Asian coal, and Europe started scrambling for cargo from wherever they could get it. They tapped Colombia, South Africa, Australia, and even Indonesia,” said Kannan.
Shift In European Demand
With this shift in European demand, Kannan said that Russia did not have a home for its coal exports and started offering cargoes at a discount to whoever was buying.
Among the countries that are now buying Russian coal are China, India, and South Korea.
“Two years ago, Russian coal imports by India were around 4 million tonnes, today it is around 17-18 million tonnes. That is a big leap you see here for Russian coal,” Kannan stated.
Other Asian Markets
Kannan also delved into other markets in Asia, such as Vietnam, which today is buying nearly two three million tons of coal per month compared to one million tonnes of coal per annum a few years back.
Citing the lack of indigenous production in Southeast Asian and Northeast Asian markets, Kannan said they all have to depend on imported coal. Russia is eyeing these regions for its exports.
“These two regions account for nearly 40 percent of the global seaborne trade. So that goes on to show the huge market in this region,” Kannan said.