Transportation issues on the railways in Russia have been impacting Russian coking coal supply, to China in particular. As a result, buyers have stopped receiving offers for premium coking coal this week, while higher prices for PCI have been reported this week from Russia to China.
One of the large Russian miners, which is involved in premium hard coking coal exports, mainly to China, "has lost over 700,000 mt of coal due to the railway failing to deliver committed tonnages. The other suppliers are in even a worse position now,” a trader said. Just today, June 16, five wagons with coal derailed near the Barabinsk station of the West Siberian Railway, according to the West Siberian Transport Prosecutor's Office. Such accidents are happening over the past few months in Russia, which is worsening the already complex situation for railway transportation. Also, since early June, in the Primorye region, which is Russia’s Far East, where shipments from such ports as Nakhodka are taking place, heavy rains and rising river levels have resulted in an emergency regime, blocking not only transportation but also affecting mines located in that area, though with no real loss figures available by the time of publication.
“There is another problem, a serious one. This is the approval of requests for transportation by Russian Railways. There are a lot of people who want to ship coal, and the capacity of railways is limited. In this regard, plans are coordinated only with large manufacturers directly by Russian Railways,” a source from the market told SteelOrbis.
The latest deals for ex-Russia PCI have been reported at $133-134/mt CFR early this week, while by the end of the week the offers have been mainly at $136-138/mt CFR and even up to $140/mt CFR by the end of the week. Also, offers for ex-Russia PCI have been heard at $140/mt CFR India. Offers to Southeast Asia have been reported at even a higher level, at $145/mt CFR. “Major Russian sellers of hard coking coal have no cargoes on offer. Elga, Kolmar - almost no price,” a trader said.