Russian Ports Have Accumulated 50 Million Tons Of Unsold Coal

There's just no demand for it.

Against the backdrop of a deep crisis in the coal industry following the loss of the European export market, Russia has seen a sharp increase in the congestion of port warehouses with coal. In total, almost 50 million tons of the product, or a quarter of all exports for 2024, have piled up in warehouses, Ingosstrakh Bank's director of analytics Vasily Kutiin told Kommersant.

The growing congestion in ports has been confirmed by the publication's other sources - from stevedoring companies (they organize the loading and unloading of goods onto commercial vessels): "Almost all ports with full warehouses - there is no export and demand in an incomprehensible market".

Managing director of the NKR rating agency Dmitry Orekhov estimates the degree of congestion of warehouse facilities in Russian ports at 15-20%. According to Oleg Abelev, head of the analytical department of Rikom-Trust investment company, coal stocks in the main ports of the Russian Federation exceed average monthly figures by 20-25%.

"The current reduction in [coal] turnover indicates a decrease in demand or problems with export, which leads to the accumulation of stocks. Until the balance is restored, the problem will persist," said OTEKO, the organization managing the terminal in Taman. They explained that excessive coal stocks are observed at large producers or traders, whose logistic or commercial chains have come under pressure.

Orekhov believes that the problem with overstocking will persist at least until the end of this year, if the situation with the fall in export demand for Russian coal does not improve and logistic difficulties are not solved. According to Abelev, at current transshipment rates, the surplus of product will persist until the end of the third quarter, and possibly into the fourth quarter (if export demand does not increase). A global increase in coal prices is needed to free up warehouses and boost exports, which will make export supplies profitable, analysts at NEFT Research said.

With warehouses overstocked with coal, the cost of transshipment at ports fell in June by a range of 23.3 to 48.6% year-on-year, to $9.2-13 per ton depending on the port, analysts calculated. That is 7.3 to 18.8% lower than May's figures.

NEFT Research said Russian thermal coal export transportation volumes through ports fell by more than 50% in May, depending on the region of origin and point of destination. Russian coal exports by sea have been declining at the fastest rate since January 2024, Roman Sokolov, director of the Center for Price Indices, stressed.

The NEFT Research earlier reported that, according to calculations, for 2024, Russia's sea exports decreased by 7.5% year-on-year and total exports by 9%. According to the Energy Ministry, exports fell 8% to 195.9 million tons last year, while production fell 0.2% to 443.4 million tons.

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