Russian coal exports declined further in 2024 amid economic sanctions and logistical issues. Recent US sanctions against SUEK and Mechel, meaning that these companies are no longer able to conclude new deals, have put under threat 20% of Russian coal exports, or more than 30 mio t.
Due to high transshipment rates, Russian mining companies did not supply coal to OTEKO’s Taman terminal in February. Thus, export rail shipments to Taman in Jan-Feb 2024 totaled only 1.3 mio t (-3.2 mio t or -71.1% vs. Jan-Feb 2023). The volumes of coal intended for transshipment in Taman are lost for the export market, as they cannot be redirected to other destinations (North-West, Far East and border crossings), caused by limited access to Russian Railways net.
In February the situation was worsened by RZD bans imposed on rail shipments of coal to a number of terminals in all directions: North-West (Ultramar, ULKT), South (Novorossiysk, Tuapse), Far East (JSC Vostochny Port, VUT, Dalmormontazh, Vostochny Lesnoy Port and Sukhodol).
The loss-making exports and reduction in seaborne shipments keep coal inventories in Kuzbass at a high level of 21 mio t. These volumes will not be delivered to the market and will lead to a shortage in export supplies in late March-April 2024.
Moreover, Rostekhnadzor inspections at underground and open-pit mines intensified since the beginning of the year, having already led to suspension of production at more than 30 coal enterprises.
For many suppliers, the current global price level and overhead costs make coal exports unprofitable. In January 2024, rail shipments fell by 1.5 mio t or 8.6%, while seaborne exports from Russian ports plunged by 2.1 mio t or 13.4%. Russian coal companies are suffering losses and are forced to cut extraction and, in some cases, to shut down mining sites and curtail projects at new deposits. In Kuzbass, Russia’s main producing region, where high-quality coal is mined, the output dropped by 2.3% in January, continuing the tendency of 2023, when extraction shrank by 9.4 mio t or 4.2%.
If current trend continues, Russian coal exports will drop by at least 25-30 mio t in 2024.