Event: on January 18, according to the Russian news agency and the Russian Ministry of energy, Russia will expand its coal supply to China to 100 million tons in the future.
Russia’s coal reserves account for 15.1% of the world, ranking second in the world, but China’s distribution is extremely uneven. According to BP world energy statistics yearbook, by the end of 2020, Russia’s proven reserves were 162.2 billion tons, accounting for 15.1% of the world, ranking second only to the United States Russia is rich in coal types and varieties, but the distribution is extremely uneven. More than 3 / 4 of it is distributed in the Far East of Russia (the first three reserves are the Republic of Sakha, Amur state and coastal border area), and the rest is in Europe (kuzbas coalfield).
Russia has an annual output of 437 million tons, ranking sixth in the world According to the preliminary statistics released by the Ministry of energy of the Russian Federation, the coal output of Russia was 436.65 million tons in 2021, with a year-on-year increase of 8.8%, ranking sixth in the world Earlier, Sergei mochalinikov, spokesman of the Ministry of energy of the Russian Federation, said that in 2022, Russia’s national coal production will reach 450 million tons, which is expected to set a record. In terms of production distribution, Kuzbass basin is the largest coal production area in Russia, accounting for about 60% of the total in Russia (coking coal accounts for a larger proportion).
Russia exported 212 million tons, ranking third in the world. In 2021, Russia exported 211.68 million tons of coal, a year-on-year increase of 9.7%, ranking third in the world.
In terms of coal types, the export of bituminous coal is about 145 million tons, accounting for 68.4%; The export of coking coal is about 30.27 million tons, accounting for 14.3%; 23.5 million tons of anthracite were exported, accounting for 11.1%; 12.07 million tons of lignite were exported, accounting for 5.7%; By destination (all varieties), the top three countries for export are China (56.99 million tons), South Korea (21.95 million tons) and Japan (19.74 million tons);
By destination (power coal excluding lignite), the top three countries for export are China (27.86 million tons), Japan (16.75 million tons) and South Korea (13.21 million tons).
Russia is China’s second largest source of coal imports, with an annual coal import volume of 56.99 million tons, a year-on-year increase of 44.1%.
In 2021, China imported 324 million tons of coal, a year-on-year increase of 6.4%. Due to the relatively strict restrictions on coal import from Australia since 2021, under the background of the overall tight supply and demand in China’s coal market, China has increased its coal import to Indonesia, Russia and the United States. The cumulative coal imports from Indonesia, Russia and the United States in the whole year were 196 million tons, 56.99 million tons and 10.6 million tons respectively, an increase of 54.74 million tons, 17.43 million tons and 9.65 million tons respectively compared with the same period last year, The growth rates were 38.8%, 44.1% and 1015.2% respectively.
In terms of coal,
Power coal (including lignite): in 2021, China imported 260 million tons of power coal, an increase of 16.1% year-on-year. Among them, 37.34 million tons were imported from Russia, with a year-on-year increase of 47.3%, accounting for 14.4%, making it the second largest importer of thermal coal. The first is Indonesia, which imported 193 million tons, an increase of 37.8% year-on-year, accounting for 74.4%; Coking coal: in 2021, China imported 54.7 million tons of coking coal, a year-on-year decrease of 24.6%. Among them, 10.74 million tons were imported from Russia, with a year-on-year increase of 59.7%, accounting for 19.6%, making it the second largest importer of coking coal. The first is Outer Mongolia, with an import of 14.04 million tons, a year-on-year decrease of 40.9%, accounting for 25.7%; Anthracite: throughout 2021, the country imported 9.24 million tons of anthracite, an increase of 19.1% year-on-year. Among them, 8.92 million tons were imported from Russia, with a year-on-year increase of 18.9%, accounting for 96.5%, making it the largest importer of anthracite. The second is Peru, with imports of 173000 tons, accounting for 1.9%.
Limited by the bottleneck of railway transport capacity, it is difficult for Russia’s exports to increase significantly in the short term. Russia’s coal transportation is dominated by railways. In 2021, the coal volume transported by Railways was 372 million tons, with a year-on-year increase of 5.2%, accounting for 29% of the total cargo transportation; Among them, 182 million tons were transported to the port (94.6 million tons were transported to the Far East port for launching, mainly to the Asian market), with a year-on-year increase of 9.3%, accounting for 51.9% of the total goods transported by railway to the port. The increase in coal shipments in 2021 exacerbated the imbalance in the development of Russian ports and railways. Only with sufficient railway capacity can we meet the high demand for coal in the West and East. However, at present, Russia’s railway transportation capacity is seriously insufficient, and the transportation volume of coal can only be increased by reducing the transportation of other goods. On the premise of the lack of infrastructure, the attempt to increase the transportation volume of exported coal through administrative intervention not only failed, but also caused many other problems, leading to the collapse of logistics in the Far East.
Investment advice. Considering the reduction of import volume under the background of inverted coal import price, it is recommended to focus on Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) , Yankuang energy, Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , China Shenhua Energy Company Limited(601088) .
Risk tip: the quantity of Russian coal exported to China exceeded expectations, and the coal price plummeted.
