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Russia hopes to sell its coal to Asia, but may be hit by a lack of demand

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Russian officials have said the ban will be turned against Europe, as Russia will redirect coal exports to other markets, according to Digi24.

Moscow is mistaken if it relies on Asia to take over the surplus, as there are signs that the most populous continent could buy less Russian coal, and not more in the coming months, according to Reuters analysis.

Another reason is Japan, the world’s third-largest coal importer, which decided last week to ban imports from Russia and look for alternative sources of supply. But the decision will come at a high cost, given that alternatives are limited to more expensive and geographically distant ones in Australia and the United States.

South Korea, Asia’s fourth-largest importer, is shunning Russian goods, and at least one utility company has said it has stopped buying coal. The country imports between 1.2 and 15 million tonnes of coal from Russia per month, according to consulting firm Kpler.

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China, the largest coal importer, would seem to be the ideal destination for Russian coal, given Beijing’s support for Moscow after the invasion of Ukraine. But the world’s second-largest economy wants to cut coal imports by 30 percent this year amid record production and high import costs. In addition, Chinese authorities have taken steps to cap domestic coal prices to curb the rise in electricity prices, making coal imports largely uncompetitive. Moreover, China has already reduced its coal imports from Russia to less than 2.5 million tons in both February and March, from more than 3 million tons in December and 5.3 million tons in August last year. last.

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Reuters analysis shows that while Beijing could take advantage to buy fuel at a lower price, there are questions about the need to increase quantities, given strong domestic production and the likelihood that Russia’s raw material will not be suitable as a substitute for coal. Indonesia, which has few impurities and is used in power plants in the south of the country.

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