On December 9, "Kommersant" reported that the Chinese fuel market is saturated, and the price of Russian coal in China has begun to fall. Due to intensified competition with other suppliers and the end of the winter fuel reserve replenishment period, the price of Russian thermal coal in the Chinese market has entered a downward trend. The growth in domestic production in China has also complicated the situation. In 2026, Russia's coal exports to China may decline, while discounts may increase.
Data from the NEFT Research review shows that the price of Russian thermal coal with a calorific value of 5500 kcal/kg in China, the largest export destination of Russia, fell by 0.9% in the week ending November 28 to $98.3 per ton (CFR, which means the seller pays for the freight, loading costs, and shipping to the port of destination). Previously, coal prices in China had been on an upward trend. The FOB (Free On Board) price at the Far East ports dropped by 0.4% to $82.6 per ton.
NEFT Research noted that Chinese buyers remain active in the market, but the previous months' upward trend in prices has largely stopped due to a significant increase in supply. According to analysts, the recent transaction price of Russian thermal coal with a calorific value of 5500 kcal/kg in South China was $96 per ton (CFR). In North China, a batch of coal for delivery in January of next year was sold at $94-96 per ton (CFR).
"With the replenishment of inventories and the reduction of expectations of cold weather risks, the market's feverish mood has cooled down," said Yevgeny Grachev, head of the Price Index Center (ЦЦИ). He stated that the current prices at the Far East ports (the Price Index Center assesses the FOB price of 6000 kcal coal at $89 per ton) are sufficient to maintain shipments and ensure an export netback of $36 per ton. "However, starting from the middle of the first quarter of 2026, as the off-season approaches, we expect prices to continue to face pressure," the analyst said. Sergey Kazachkov, partner in the "Investments and Capital Markets" sector at Kept company, pointed out that if the current profit margin for thermal coal sales in the eastern market is low, then despite the decrease in semi-trailer rental rates and port transfer fees, coal will still be unprofitable in other export directions.
Alexander Kotov, a consultant partner at NEFT Research, said that the main competitor of Russian coal producers in the Chinese market is neighboring Indonesia - the world's largest thermal coal exporter. According to BigMint data, Indonesia's coal exports are beginning to recover by improving ship turnaround efficiency. In the week from November 24 to 28, the supply from the country increased by 5.6% to 7.73 million tons. Mr. Kotov said that if market competition intensifies, Russian coal producers may be forced to shift their exports to alternative markets, which would lead to increased logistics costs and an increased proportion of loss-making exports. "However, Russian suppliers must offer discounts regardless: the current business model of companies is to retain the market, not to make profits."
Boris Krasnozhenov, head of the securities market analysis department at Alfa Bank, said that the FOB (Free On Board) price of Russian coal in the Far East is currently discounted by 18% compared to the Australian benchmark. He said that given its own production and the implementation of a plan to transition to renewable energy, China's coal import dynamics are increasingly dependent on price competition. The analyst pointed out that China meets only about 5% of its thermal coal demand through imports, while in the first nine months of this year, China's coal production increased by 2.7% year-on-year.
Krasnozhenov said that according to data from China's General Administration of Customs, the total volume of Russian coal exports to China from January to October 2025 was 73.1 million tons, a decrease of 8.3% compared to the same period last year. He predicted that the supply in 2026 would be close to the level of 2025. However, NEFT Research gave a less optimistic forecast: based on the dynamics of the first ten months of 2025, the export volume of thermal coal may decrease by 10% in 2026, reaching 56-58 million tons. Oleg Yemelichenkov, senior director of corporate ratings at "Expert RA" company, added that exports are also hindered by internal restrictions, including the fact that the capacity of the Eastern Transport Corridor is nearly saturated. Additionally, he pointed out that although Russian coal has the advantage of its high quality, competition from Australia and Mongolia in the Chinese market is also increasing.
Original article: toutiao.com/article/1851002949407872/
Statement: This article represents the views of the author.