The key market for Russian coal under Western sanctions is under threat – Japan, South Korea and Taiwan began to reduce purchases of Russian coal, trying to replace it with supplies from Australia. This is evidenced by the customs statistics of countries, to which Kommersant drew attention .
In the first seven months of 2022, South Korea reduced coal supplies from Russia by 3% (to 12.8 million tons), Japan – by 25% (to 8.4 million tons), Taiwan reduced the share the most, whose supplies fell by 33 .3% and amounted to 4.4 million tons. The publication notes that before the war with Ukraine, the Asian market was considered as one of the most promising, which was even reflected in the Strategy of the coal industry.
The conservative forecast for the development of the industry assumed an increase in coal supplies to Asian countries from 84 million tons in 2018 to 123 million tons in 2035. It was supposed to increase the volume of deliveries primarily due to deliveries to China, India, Japan, South Korea and Vietnam. However, Japan, following Europe, has already announced its intention to abandon Russian coal in its energy balance. The share of domestic coal in Japanese imports in 2021 was estimated at around 11%.
South Korea also intends to reduce supplies, but its level of dependence on Russian supplies is many times higher – in the first quarter of 2022, Russian supplies accounted for 68%. Taiwan has also already announced its intention to phase out Russian coal, refusing to renegotiate supply contracts in August. It is planned to replace Russian supplies with imports from Australia, but experts warn that this will significantly hit the budgets, since supplies will be much more expensive.
Due to the refusal of Russian supplies, domestic companies will have to redirect about 63 million out of 172 million tons of the country's total coal exports. Experts call China and India the most obvious sales markets, which, following the example of oil supplies, can take advantage of the situation and increase the supply of Russian raw materials at a discount. The European market for Russian suppliers has been closed since August 10, when a full-fledged embargo on Russian coal was introduced.
Because of the sanctions, the Russian coal industry found itself in a large-scale crisis. The European embargo has effectively stopped the export of coal by water, and the railway transport capacity simply cannot cope with the volume of deliveries. As a result, many companies faced a real threat of bankruptcy due to the inability to sell their own products.