RUSSIA – China & India Stop Buying Russian Coal After Sanctions despite Huge Increase in DEMAND

RUSSIA – China & India Stop Buying Russian Coal After Sanctions despite Huge Increase in DEMAND

hi welcome back to Joe blogs in today’s
episode I want to talk to you about
what’s happening in the Russian economy
and specifically what’s happening with
Russian coal now don’t worry you haven’t
been transported back to the 70s you’re
not watching me on one of those giant
televisions that you actually had to get
out of your chair and turn over manually
rather than using a remote control you
haven’t got your afro back your bell
bottom trousers you’re not at the Disco
and you don’t don’t have to send me a
letter of complaint using your
typewriter coal is actually still
relevant today and would you believe
that the world consumption of coal in
2023 was actually the highest ever so
despite the fact that everybody’s
talking about moving to renewable energy
and moving away from Dirty fossil fuels
coal is still hugely in demand and is
still growing and the main driver as to
why coal consumption is increasing is
because China and India are still using
it in huge quantities to produce
electricity so in today’s video we’ll
talk about what’s happening with Russian
coal because over the last couple of
years Russia has hugely increased its
exports to both China and India because
as you’ll know if you follow the channel
they’ve become Russia’s two most
important trading partners predominantly
for oil but obviously when you’re
talking about oil you can also have a
chat about what’s going on with coal and
start increasing your exports however
the USA has locked onto this and in
February 2024 introduced sanctions on
Russia’s two biggest coal producers suek
and mechel and as a result of that the
exports to India and China have fallen
dramatically in March and the impact of
these sanctions now has the potential to
further reduce Russia’s revenues so in
today’s video we’ll talk about what’s
going on with the global production and
consumption of coal because I think
you’ll be surprised at how much is still
being used and produced globally we’ll
talk about what’s happening with China
because they’re the world’s largest
consumer of coal they’re actually the
world’s largest producer of coal as well
but they don’t produce enough and so
therefore they have to import from
countries like Russia we’ll talk about
the sanctions that have been applied
against Russian coal and what the impact
of that is going to be on Russia’s
revenues and then finally today I’ll
wrap up with my summary so what I think
is going on with regards to Russia’s
coal industry and what the impact of all
of this will be on the Russian economy
but before we get started on all of that
I’d like to say thank you so much to
everyone that’s supporting this channel
really really appreciate all of your
support if you bought me a coffee or
sent me a YouTube super thanks thank you
for the time and effort you’ve taken to
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and if you’re a long-term supporter of
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buy me a coffee membership or YouTube
membership thank you so much for that
really keeps me motivated keeps me
making more videos so thank you for your
support so just when you thought that
everybody in the world was moving
towards so solar power wind power and
driving Teslas unfortunately I have to
break the news to you that in 2023 the
global use of coal hit an all-time high
and the main driver for the increase in
demand in Coal has been the use in
thermal power stations to produce
electricity and for the first time in
2023 the global amount of coal exported
topped 1 billion tons this chart shows
the global consumption of coal dating
back to 2002 and what this shows is that
in 2023 for the first time Global
consumption was more than 8.5 billion
tons of coal and when you look at the
breakdown more than half of the global
demand came from China that consumed
over 4.5 billion tons of coal in 2023
the world’s second largest consumer is
India who consumed more than 1 billion
tons of coal followed by the other
countries of Asia the United States the
European Union and then the rest of the
world and this chart shows the main
driver for the increase in demand which
is the use of coal in electricity power
stations what this shows is that between
2020 and
2023 there has been a significant
increase in the use of coal to produce
electricity and these charts show the
amount of electricity being generated
using coal by eight of the largest
importing countries in the world and
these charts date back to the start of
2019 and what these charts show is that
China India and the Philippines have all
increased the amount of electricity that
they’re generating using coal and the
amount generated by the other five
countries has remained relatively
constant and this table provides a
detailed breakdown of the world’s
largest consumers of coal and what this
shows is that China is by far the
world’s largest consumer of coal
consuming over 4.3 billion tons India is
the second largest consumer consuming
around 1 billion followed by the United
States at 730 million
Germany Russia Japan South Africa South
Korea Poland and the 10th largest
consumer of coal in the world is
Australia which consumes around 130
million
tons so what we’ve established so far in
this video is that there is a strong
demand for coal and that demand is
continuing to increase remarkably even
though we all think we’re living in a
renewable World we’re not the majority
of countries are still dependent on
fossil fuels but in terms of looking at
the economics of this situation and
establishing which countries are
importing and which countries are
exporting coal we need to look at Global
Production before we dive into having a
look at the detailed figures I thought
we’d have a look at this graph because
graphs are a really good visual
representation to explain who’s the
biggest and who’s the smallest in any
situation and what this chart shows is
that China is by far the world’s largest
producer of coal and as we just
discussed it’s also the world’s largest
consumer followed by India which is the
second largest consumer now
interestingly the world’s third largest
producer of coal is Indonesia who we
haven’t mentioned so far followed by
Australia the United States Russia and
then we’ve got the rest of the world and
this table gives us the detailed figures
of the world’s largest producers of coal
and what this shows is that China
produces around 3.7 billion tons
compared with its demand of around 4.3
billion so that means that China is a
net importer of coal China’s demand for
coal significantly exceeds its
production and the same applies to India
which is producing around 760 million
tons but has a demand of almost 1
billion the United States is the world’s
third largest producer of coal and it
produces roughly around the same amount
that it consumes but the United States
is still a net exporter because there
are different categories of coal so even
though it’s producing enough to serve
its own demand because that demand is
slightly different to the production
that it’s actually delivering it has to
import some and it exports some
Australia is the world’s fourth largest
producer of coal producing over half a
billion tons a year and that compares to
demand of around 130 million so
Australia has a significant Surplus and
therefore is one of the world’s largest
exporters of coal Indonesia is the
world’s fifth largest producer of coal
producing over half a billion tons
compared with the 100 million tons that
it consumes and that means that
Indonesia is actually the largest
exporter of coal in the world Russia is
the sixth largest producer and produces
roughly double the amount that it
consumes making Russia the third largest
exporter behind Indonesia and Australia
the seventh largest consumer of coal in
the world is South Africa followed by
Germany Poland and
Kazakhstan so Russia is the world’s
third largest exporter of coal and the
biggest buyer of coal globally is China
so let’s have a look at what’s been
happening with Russia’s exports of coal
over the last 7 years this chart shows
the destination of Russia’s coal exports
between 2016 and
2023 and the color coding here relates
to different destinations what this
shows is that in 2016 Russia’s largest
purchaser of coal was the European Union
which accounted for around 40% of all
Russian coal exports the second largest
market was Korea which accounted for
around 15% China was the third largest
accounting for around 10% Japan was the
fourth largest buyer accounting for
around 7% turkey was number five
accounting for around 5% the sixth
largest buyer was Taiwan followed by
India and the rest of the world if we
now look at the situation in
2023 you can see that there’s been a
significant shift in terms of which
countries are buying coal from Russia
the European Union has stopped making
any purchases as a result of the
sanctions that are being applied
directly against Russia now
interestingly when the first round of
sanctions came in they only applied to
oil and gas and coal was not included
because it was seen as something that
was essential for a lot of countries to
continue buying and you can see that
there was a really gradual tapering of
those purchases as European countries
voluntarily decided that they wanted to
Source their coal from other suppliers
so the European Union has stopped buying
all of its coal imports from Russia and
obviously that’s left a gaping hole in
terms of where Russia was going to sell
it to and you can see that that hole has
been filled entirely by China and in
2023 China accounts for around 50% of
all of Russia’s exports and this chart
shows the breakdown of China’s coal
Imports by origin over the past 3 years
and what this shows is that there was a
significant increase in the volume of
coal being imported from Russia in 2022
and 2023 those volumes increased from
49.6 million tons in 2021 to 57.5
million in 2022 to 75.8 million in 2023
and just to put that into an economic
context Russian coal is trading for
roughly around $100 per ton Russia’s
second largest purchaser of coal is
Korea which which accounts for around
12% followed closely by India which has
significantly increased its purchases
over the last 2 years as to sanctions
have been applied against Russia and
Russia has had to find new markets India
has become a willing buyer of Russian
coal predominantly because it’s been
offered good deals India is very
pragmatic and will take the deal that’s
best for the country and as Russia was
desperate to find new buyers it offered
advantageous prices to India and so
there’s been a big increase in purchases
from India and there’s also been a
significant increase in purchases from
Turkey for exactly the same reason so
the overall summary of this chart is
very similar to what we’ve seen with oil
and gas over the last few years there’s
been a significant Fall Away in terms of
Russia’s exports to the European Union
and those exports have been
predominantly replaced by a huge
increase from China and also increases
from India and
turkey as I mentioned at the start of
today’s video in February 2024 the USA
identified Russia’s two largest
producers of coal a business called suek
which is a Siberian Coal Energy company
and another business called mechal and
these two account for the vast majority
of all of Russia’s coal exports and as a
result of those specific sanctions China
and India have now become concerned
about dealing with these businesses and
so we’re starting to see a massive
reduction in the purchases of Russian
coal by Russia’s two largest buyers but
it doesn’t stop there because meckel and
suek actually control the ports where
all of the coal exports move from in
Russia so a lot of other companies that
are producing coal and trading
businesses that are buying coal and then
finding buyers overseas also use those
ports and it’s now been reported that
those Russian businesses are avoiding
the ports that are being run by suek and
Mecha and as a result of this those
businesses are now struggling to be able
to deliver the logistics to actually
move the coal so the KnockOn
implications of the sanctions that have
been applied against the two largest
producers are also having ramifications
for all of the other coal businesses in
Russia so this is an absolute nightmare
from Russia’s
perspective this chart shows the volume
of Russian coal exports to Asia India
and China between September 23 and
February 24 and the scale on the left
hand side of this chart is is measured
in millions of tons and goes from zero
at the bottom to 12 at the top the blue
bar chart show the exports to Asia the
orange bars show India and the green
bars China what this shows is that
between September and February there’s
been a significant fall in the volume of
coal that Russia is exporting in
September Russia exported around 11
million tons of coal to Asia however by
February that figure was down to just
over 8 million which represents a fall
of around 30% and if we specifically
look at the the movement for China in
September Russia exported around 5
million tons and that figure increased
to around 5.5 million in October however
in February that figure was down to
around 3.5 million and if we look at the
situation for India in September Russia
exported around 1.5 million tons that
figure increased to 2 million in October
however in February it was down to less
than 1 million and the figures for March
2024 have now been released and show
that China reduced its purchases from
Russia by 21% compared with the
purchases for February and the purchases
by India were down to their lowest level
since November 23 so what we’re starting
to see here is the impact of these
sanctions causing India and China to
decide that they no longer want to buy
coal directly from Russia and they’re
purchasing from elsewhere this is
obviously a major problem from Russia’s
point of view because they’re the go-to
markets in the past when Russia has had
problems in terms of making sales it’s
turned to China and India but if China
and India are now turning their back on
Russia it doesn’t really have that many
other options to go
to so what’s the summary and conclusion
today well I wanted to post this video
because I think what’s happening with
coal exports from Russia is really
fascinating up until you watch this
video I’m sure you thought that coal was
dead in the water it was yesterday’s
fuel nobody wants to deal with coal it’s
dirty it’s messy it’s something from the
Dark Ages but as we’ve seen from the
data in today’s video coal is on the up
and actually Global use of coal is at an
all-time high it’s more popular today
than it was in the 60s and70s which is
hard to believe but obviously when you
look at the breakdown of where that
increase in demand is coming from the
majority of it is being driven by China
which is buying more than half of the
world’s coal supplies followed by India
and a few other countries so we are
seeing a shift I think in the developed
World there is a momentum towards
renewable energy and a move away from
things like the use of coal but globally
speaking there is still strong demand
for coal and what we’ve seen is that
Russia is the world’s third largest
exporter of coal and because of the
sanctions that have been applied against
it over the last few years Russia has
lost its main Market which was the
European Union and as a result of that
it’s pivoted in exactly the same way
that it’s done with oil and gas and it’s
now selling a lot more of its coal
directly into China and India and China
is the biggest buyer of Russian coal now
the USA has woken up to this fact
because Russia is receiving over a
hundred billion dollar per year from the
sale of its coal so it’s a significant
amount of income and sanctions have now
been applied against the two largest
producers of coal in Russia and the
direct impact of that is going to be
devastating from Russia’s point of view
because we’re already seeing a reduction
in the purchases directly from China and
and India because as we’ve discussed in
other videos despite the fact that
neither of those countries are applying
sanctions against Russia themselves so
they’re quite happy to buy things from
Russia what they don’t want to do is
upset their export markets because China
and India are exporting huge volumes of
things directly to the West so they want
to keep all of those markets current and
alive and the threat that they’re now
facing is secondary sanctions and
secondary sanctions is basically a
situation whereby the USA and Europe and
other countries are saying we’ve
sanctioned these companies in Russia if
you deal with those companies then we
will apply sanctions against you for
trading with those sanctioned businesses
and that’s the concern that India and
China have now they’re happy to buy that
coal they would happily carry on with
these trading Arrangements if sanctions
hadn’t been applied against suek and
mechel but because those businesses have
now been sanctioned India and China are
saying okay we’re going to get our coal
from somewhere else and that’s a major
problem from Russia’s point of view
because they’re losing those sales and
there aren’t that many other big markets
to go for when one buyer represents more
than 50% of the global purchases you
need to have good relationships with
that buyer if you’re the third largest
exporter and that’s the Dilemma that
Russia now faces it’s producing huge
amounts of coal but the main buyer
potentially now is saying No thank you
we don’t want to buy Russian coal we’ll
buy it from Indonesia or Australia or
somebody else and that leaves Russia
with a problem because it’s going to
produce all this coal but it’s not going
to have any markets to be able to sell
it into and that’s the point of the
sanctions that’s what the West is trying
to achieve it’s trying to cut off all of
the income that Russia has earning from
the sale of all of these fossil fuels so
that Russia eventually gets to the point
where it can’t afford to keep funding
the war in Ukraine and comes around the
table to agree some sort of settlement
that’s the point of the sanctions and
what we’re seeing now is that those
sanctions are being effectively policed
and India and China are very nervous
about being hit with secondary sanctions
so the overall summary of today’s video
is that Global demand for coal remains
high it’s actually at an all-time high
the highest it’s ever been the world’s
biggest buyer of coal is China closely
followed by India both of those
countries are now concerned about the
sanctions that have been applied against
the Russian coal industry they’re
reducing their purchases of Russian coal
and that represents really bad news for
Russia and the Russian economy so
hopefully you’ve enjoyed today’s video
you found it useful informative and
thought-provoking if you’ve liked what
I’ve said then please give me a thumbs
up thank you for watching this video all
the way through to the end and here’s
something to B of smile on your
face e

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In this video I investigate RUSSIAN COAL. You may be surprised to hear that 2023 represented a record year for Coal Demand with the majority of that demand coming from China and India. Over the past 2 years Russia has significantly increased its exports of coal to China and India. In this video I look at the volume of Russian Coal being supplied, the cost and practicalities of switching supply and discuss whether it is possible for EUROPE to switch suppliers.

For specific details please check out the CHAPTER list below.

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Chapters:
0:00 Intro
2:55 GLOBAL DEMAND
5:14 GLOBAL PRODUCTION
7:56 RUSSIA
11:26 SANCTIONS
12:47 RUSSIAN EXPORTS
14:40 SUMMARY & CONCLUSION

#china
#russia
#coal
#india
#coalindia
#sanctions
#ukraine
#GLOBALFINANCIALCRISIS
#RUBLE
#SWIFT
#recession
#USA
#NATO
#WW3
#WORLDWAR3