OREANDA-NEWS   Russian coal miners increased supplies to South Korea by 24% in 2022 by providing discounts, displacing the main player in this market — Australia. The growth of supplies was facilitated by a short transport shoulder from the Far East, as well as relatively affordable freight rates, which periodically allowed cargo to be sent to South Korea even from the ports of the European part of the Russian Federation. However, according to experts, the situation on the thermal coal market is changing: prices are falling, and demand in Europe is declining due to warm weather. Russia in 2022 increased exports of thermal coal to South Korea amid a reduction in supplies from Australia, which is the main source of coal for this country, follows from the December report of Argus Russian coal. According to the pricing agency, buyers from South Korea have begun to increase imports from Russia since mid-2022, importing about 2 million tons of thermal coal every month. Coal production in Russia by the end of 2022 increased by 0.3% to 442 million tons. Coal exports decreased by 7.6%, Deputy Prime Minister Alexander Novak reported in January this year. Earlier, the Ministry of Energy reported that in 2021 exports amounted to 223.4 million tons.

The increase in exports to South Korea, which Russia ranks as an unfriendly country, has become possible due to discounts, convenient delivery times and favorable freight rates. At the end of December, Australian coal of 6000 kcal on FOB terms cost $409.5 per ton, while Russian coal was offered to South Korean consumers more than twice (by $244 dollars per ton) cheaper. Russian coal loaded in January cost $170-172 per ton in one of the ports of the Far East on CIF terms. As Argus notes with reference to a market participant, Russian coal producers continue to offer high-calorie coal at a discount to South Korean consumers, as they are ready to start implementing procurement plans for the second quarter of 2023.