RE: Russian Coal Embargo5 Apr 2022 21:57
it will be able to receive vessels with a deadweight of up to 168,000 tons. Believe me, you will see that in the coming year the volumes of Russian coal to the Indian market will grow. We see an active request for this from India.
– How much will the supplies increase?
– It will depend on the price situation. Our priority market has always been China, which consumes large volumes of concentrate and buys coal at high prices (only Japan is higher). We have direct long-term contracts with some large metallurgical companies. Moreover, the demand from foreign companies, such as Japanese JFE or Chinese Baowu Steel, exceeds our supply. Nevertheless, on the eve of the growth of production volumes, we are working on other supply lines, including to India, to expand sales markets. Kolmar specialists are ready to travel to India, meet with metallurgists and discuss technical and commercial issues. We sent trial batches of Yakut coal to Tata Steel, JSW Steel, Rashtriya Ispat Nigam (also known as Vizag Steel. – Vedomosti), the reviews came positive. Now the pandemic has intervened in the negotiation process – we communicate with foreign partners by correspondence, but serious, long-term contracts are not discussed, of course. We are waiting for the borders to open.
– How are things going now in your traditional South Asian export markets and, in particular, in China?
– China remains a priority market for us: about 70% of our exports go to this country. Chinese partners know our coals (brands Deni Deep – mined at the Denisovskaya mine, Inagli – at the Inagli GOK), have included them in their charge. In general, Russia has a huge potential for coal supplies to China.
– How do you assess the impact of Chinese demand on the global market?
– China still defines the price situation as the largest importer of coking coal. The last two years have only confirmed this, since the decline in global demand outside the Chinese market has led to the fact that the price situation was actually determined by domestic demand and government regulation of the industry in China. For several years now, exporters have been faced with the practice of limiting the volume of coal imports in Chinese ports. As soon as the volume of imported coal approaches the values of the previous year, Chinese ports begin to increase the period of customs procedures or simply stop accepting coal. Of course, this greatly affects the market and prices. Consumers are forced to put the risks of ship downtime into the price of coal, and as a result, the sales prices of exporters are greatly reduced. In 2019, due to the introduction of quotas and the lack of strong demand in alternative markets, the price fell from above $190 to $135 in a few months.
This year, due to the pandemic, the situation is even more difficult and China has actually turned out to be the only market not only for coal, but also for many other types of products. Prices are restored either with the renewal of quotas at th
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