News dynamics

According to information released by market analysis agency CCA Analytics on August 17, from January to July 2024, Russia's coal production and exports all declined, and the year-on-year decline in coal exports was 12.5 times the decline in production.

In the first seven months, Russia's total coal production fell to 0.2506 billion tons, down 1.9 million tons or 0.8 percent from a year earlier. At the same time, the export volume of coal transported by rail fell to 0.1058 billion tons, a decrease of 11.2 million tons from the same period last year and a year-on-year decrease of 10%.On the one hand, the decline in export volume is higher than that of coal production, which is due to the problem of railway logistics and transportation and the resulting saturation of coal mining inventory. On the other hand, Russia's total coal production has not declined much, mainly due to the growth of coal production in the eastern Yakutia region, and the coal mined by companies such as Elga (Elga) and Kolmar (Kolmar) in the Yakutia region is mostly raw coal that has not been washed and processed in coal washing plants. As much as 50 per cent of this coal is lost when it is washed and processed, but these figures are not reflected in the statistics on coal production.

Changes in Russian coal production in the first seven months

In addition, compared with the coal mines in the Kuzbass Basin, which is the main production area, the coal mines in Yakutia are closer to the Far East port, which simplifies logistics and greatly reduces transportation costs.In the first seven months, Yakutia coal production surged to 26.8 million tons, up 6.3 million tons or 30.7 percent year on year. Nevertheless, exports only increased by 1.4 per cent from 14.7 million tons to 14.9 million tons, an increase of only 200000 tons. In Kuzbass, Russia's main producer of high-quality coal, coal production fell to 0.118 billion tons in the first seven months, a year-on-year decrease of 7.4 million tons. During the same period, exports fell from 68.8 million tons to 61.1 million tons, down 7.7 million tons and 11.2 percent. A large part of the coal produced in the Kuzbass Basin is commercial coal after processing in coal washeries.During the same period, coal production in other regions was 0.1058 billion tons, a decrease of 700000 tons and 0.7 per cent year-on-year; exports fell from 33.5 million tons to 29.8 million tons, a decrease of 3.7 million tons and 11 per cent year-on-year.

Therefore, it is expected that in the second half of 2024, due to the continued decline in exports, there will be a shortage of Russian high calorific value coal resources in the global market. The decline in its export volume is mainly due to serious challenges such as logistics constraints, high production costs and international sanctions, which force most Russian coal production suppliers to export coal with zero or negative profits.Given rail capacity constraints on all coal export routes, Russian coal supplies until September-October are currently sold out.

Changes in coal transportation for Russian railway exports in the first seven months

 Since the beginning of this year, more than half of Russia's coal production suppliers have fallen into a serious loss situation, resulting in a shortage of investment funds, which may also lead to a further decline in coal production, a reduction in exports, and an increase in coal prices in the global market.