European coal imports from Russia rise

Coal consuming countries in northwest Europe raised Russian thermal coal imports by 4pc or 1.5mn t on the year to 43.73mn t last year, according to data from GTT. Receipts from Russia increased despite a drop of overall northwest Europe's imports. As a result, Russia raised its share of northwest Europe's coal imports to 48pc last year from 43pc a year earlier, winning market share from Colombia and South Africa.

Colombia cut its supplies to Europe last year as it could hardly compete with cheaper Russian and US coal and aimed to shift to other destinations, including southeast Asia. Long delivery terms and unattractive prices for high-grade coal also harmed supplies from South Africa.

Most northwest European countries raised coal imports from Russia, with the largest increases in the Netherlands and the UK. The Netherlands raised imports from Russia by 8.4pc on the year to over 14.45mn t in 2018, while the country's overall imports fell. The Netherlands is a major destination in northwest Europe for imported thermal coal, including from Russia, being a large hub, from where imported coal can be shipped elsewhere in Europe. The UK boosted thermal coal imports from Russia by 35.8pc to 2.96mn t as the country increased thermal coal imports overall by 35.5pc to 6.45mn t last year as a result of rising demand from utilities.

Market participants expect coal imports to northwest Europe to decline by another 3-5pc this year from 2018. But imports from Russia are expected to remain high as Russian coal prices successfully compete with output from other origins. At the moment competition in Europe from US and Colombian material remains minimal for Russian coal, while depreciation of the rouble against the US dollar, expected later this year by market participants, could support Russian coal exports to Europe.

Find more news, price information and market analysis on Russian coal exports in Argus Russian Coal report.