Kazakh coal bypasses Russian without discounts

The transit of Kazakh coal through Russia for export to Europe and Asia is growing. It is profitable for manufacturers, as they sell without discounts, which make Russian exports unprofitable, experts say.

Kazakhstan's coal exports through Russia increased by 38% in the first seven months of the year to 6.7 million tons. Such data are provided by Vedomosti with reference to Argus. The main growth went through Taman, where supplies almost doubled to 2.3 million tons. In July, a historical maximum of 415 thousand tons was set.

Deliveries through the Baltic ports, in turn, increased by 19%. 4.1 million tons of coal were supplied through Ust-Luga, St. Petersburg and Vyborg.

According to Argus, the main growth occurred on long-flame and gas coals. Despite the fact that the main supplies go to India, China, Turkey, Poland and Taiwan.

The transit of Kazakh coal through Russia contrasts with the export of Russian coal, Vedomosti writes. Exports of own products through the south-western direction decreased by 14% to 1.25 million tons, and through the north-western direction by 27% to 3.2 million tons.

NEFT Research consulting partner Alexander Kotov noted that unlike Russian coal, Kazakhstan's remains profitable. For example, the estimated netback for the supply of energy Shubarkol coal (produced by Shubarkol Komir) with a calorie content of 5700 kcal / kg through Ust-Luga is $ 9-10 / t, through Taman — $ 13-14 / t, the expert explained.

Independent industrial expert Maxim Khudalov notes that the discount that Russian manufacturers are forced to provide seriously affects profitability.

"Yes, there is a discount of up to 30% on Russian products from the price at which Kazakh coal goes to the south of Europe. This is precisely the effect of sanctions, since, alas, we do not have a shadow coal transportation fleet," the expert notes.