China Buys Cheap Russian Coking Coal as World Shuns Moscow
(Bloomberg) -- China more than doubled imports of steel-making coal from Russia in March, procuring the fuel at a discount as other nations move to ban deliveries due to the war in Ukraine.
Coking coal imports from Russia jumped to 1.4 million tons in March, compared to 550,000 tons for the same month last year and 1.1 million tons in February, according to Chinese customs data. Imports of thermal coal, used for power generation, fell as mild weather curbed demand and China boosted domestic output.
China is taking advantage of steep discounts to Russian coal, as other buyers -- like Japan and the European Union -- move to ban imports of the fuel. While Russian coal prices increased modestly in the last year, they’re still well below rates from other suppliers, like Indonesia and Mongolia.
While China is moving to drastically increase domestic coal output, the nation’s mines produce fuel that is low quality and unsuitable for steel mills. That means steel-makers are still dependent on overseas suppliers for coking coal.
Asia’s biggest economy has signaled that it is interested in purchasing more Russian energy despite international pressure over its support for President Vladimir Putin. Vice Foreign Minister Le Yucheng recently hailed “the great resilience and internal dynamism of bilateral cooperation” with Russia.
China’s crude imports from Russia, meanwhile, fell 14% to 6.39 million tons in March from a year ago, although they rose from February, which was disrupted by the Lunar New Year holiday.
Other March energy data released on Wednesday showed:
- Coal imports, including both thermal and coking coal, from Russia fell 30% y/y to 3.1 million tons in March
- LNG import from Russia rose 0.5% y/y to 321,000 tons in March
- Pipeline gas imports from Russia weren’t reported for the last three months
Meanwhile, China’s metals imports from Russia were mostly lower:
- Refined copper imports fell to 9,914 tons, lowest since Feb. 2018
- Refined nickel imports were at 3,382 tons, up from February, but still relatively low compared with recent months
- Palladium imports at 192 kg were also much lower than February
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With assistance from Bloomberg