50 million tons of coal stuck in Russian ports due to industry crisis

About 50 million tons of coal have accumulated in Russian ports, which is about a quarter of the total export volume for 2024.

The reason is the crisis in the industry caused by the loss of the European sales market, the “Business Censor” reports.

Representatives of stevedoring companies report that warehouses in the ports are full, there is no demand, and the market remains unstable. According to sources, coal reserves in the main ports exceed the average by 20-25%.

Terminal management companies explain that the reduction in turnover indicates a decrease in demand or problems with transportation, which is why stocks are accumulating. The situation will not change until the balance is restored.

Stocks have increased especially sharply among large producers and traders who have encountered difficulties with logistics or commercial ties. It is expected that the problem of overstocking will continue at least until the end of the year, unless export demand increases and logistical difficulties are resolved.

To free up warehouses and revive exports, coal prices need to rise to a level that will make exports profitable. Currently, coal transshipment in ports has become cheaper — in June by 23-49% year-on-year, to $9.2-13 per ton. This is 7-19% less than in May.

In May, the volume of thermal coal exports from the Russian Federation by sea decreased by more than 50%, depending on the region. The decrease has been ongoing since January 2024.

Earlier, it was reported that in the first quarter of this year, losses of Russian coal companies reached a historical maximum — 79.9 billion rubles. The industry was losing about 26 billion rubles every month, or 900 million rubles (over $11 million) per day.

In June, the Russian government adopted measures to support the coal industry, in particular, enterprises in Kuzbass — the largest coal-mining region. It was previously reported that Russian coal exports have been declining for the third year in a row. In 2023, 195 million tons were sold to foreign markets – 17.5 million tons less than in 2022 and 26.2 million tons less than in 2021.

Earlier, USM reported that Russia is increasing illegal fishing off Africa under the guise of scientific research.