Russia's coal sector crisis intensifies

Сoal production in Russia fell by 6.7% year-on-year in July 2024, and its total volume of 31.5 million tonnes was the lowest since the Covid-19 pandemic.

Source: The Moscow Times with reference to Federal State Statistics Service

Details: Relative to the peaks seen in December 2022, coal companies have lost about 12 million tonnes of monthly production, or 27%.

Production of hard coal, the main product of coal mining, which accounts for 80% of production, fell by 8.2%, and anthracite, the most valuable type, by almost a quarter (23.7%). In August, the decline in hard coal production accelerated to 10.1% year-on-year.

At the same time, losses incurred by unprofitable companies increased by 3.4 times, while profits of profitable companies decreased by 72%.

Western sanctions have reportedly become a key problem for the coal industry.

Unlike oil and gas, which the European Union continues to buy, albeit in small volumes, coal has been subject to a total embargo, and Asian countries that bought Russian coal last year have sharply reduced their demand.

Supplies to China in the first half of 2024 decreased by 8%, the reason being the imposition by Beijing of duties on Russian coal. At the same time, other suppliers, such as Indonesia and Australia, were not affected by them, as they are part of the free trade zone with China.

India reduced coal imports from Russia by 55% and Türkiye by 47%. In January-July, total coal exports from Russia fell by 11.4% to 112.6 million tonnes.

Background:

• Russia is interested in increasing its coal exports to India to meet the growing demand for fuel in India.
• The proportion of unprofitable coal companies in Russia has exceeded 52%, while coal exports have fallen by 12%.

Support UP or become our patron!