South Korea lifts Russian coal imports

Russian thermal coal deliveries to South Korea jumped to a record high in July, rising by 41pc on the year as competitive prices and tighter sulphur restrictions boosted buyers' preference for Russian material.

South Korea imported 3.1mn t of thermal coal, lignite and anthracite from Russia in July, according to customs data, giving Russia a 29pc of the South Korean import market, surpassing its previous high of 28pc in May 2015.

The comparatively low sulphur content in Russian coal makes the fuel particularly attractive to South Korean buyers. The country's thermal coal importers are required to keep the average sulphur content of their imports no higher than 0.4pc as part of a government initiative to control air standards.

The availability of low-sulphur Indonesian coal was limited in July, but Russian coal was a viable option as cargoes of "nearly 0.4pc" sulphur material were available, a market source said.

Suek, Kuzbassrazrezugol, SDS-Ugol and Kuzbasskaya Toplivnaya Kompaniya remain the main Russian bituminous thermal coal suppliers to South Korea this year, Russian customs data show.

The Asian country's coal imports from Australia — which remains the largest supplier — increased by 41pc on the year to 3.8mn t in July, but receipts from Indonesia fell by 17pc on the year to 2.5mn t.

South Korea's total thermal coal imports were 12pc higher on the year at 11.3mn t.

The country's coal burn was likely boosted by firm power demand in August and could remain strong, with demand forecast to climb on the year and reach at least a five-year September high, according to a report from the Korean Power Exchange.

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