Netbacks on the Kuzbass coking coal collapsed
The profitability of the export of coal of coal from the Russian Federation, which grew up in the first decade of March, by the middle of the month fell 7-10% per week due to reducing world prices and weakening the ruble. The fall was recorded not only east, but also in the northwest and southern, which can subsidize. Analysts do not see fundamental factors for the growth of demand, primarily in China.
Netbacks on the Kuzbass coking coal collapsed on March 10–16 after growth at the beginning of the month, follows from the NEFT ResEARCH study. Netback on FOB Conditions Far East, a week by week, decreased by 6.9%, to 3.36 thousand rubles. per ton. In the ports of the north-west and south, the indicator decreased by 9.8% and 10%, to 4.09 thousand rubles. per ton (FOB Finnish Bay) and 3.89 thousand rubles. per ton (Fob Azov-Black Sea basin). In the period of March 3-9, non -backs grew against the backdrop of a decrease in tariffs for transshipment and rental rates of gondola cars (see “Kommersant” of March 17).
“Non -back supplies of coal coal decreased against the background of the ongoing correction of quotations and weakening the ruble course. Several Russian exporters stopped deliveries to China because they suffer losses, ”Neft Research analysts describe the situation. Prices for Russian metallurgical coals over the reporting week in the western direction decreased by 1.1–3.6%, to $ 121.2–187.5 per ton, depending on the port. In the eastern direction, the quotes fell by 6.6–11.1%, to $ 133.4–188 per ton.
There are no fundamental factors for the growth of demand, primarily in China, noted by Alexander Kotov, a Neft Research partner in consulting. According to him, the release of Chinese companies from the New Year holidays did not lead to an increase in demand for imported coking coal. According to the expert, this is due to low demand for steel in the country, the growth of internal production of metallurgical raw materials and the fact that manufacturers work more for the warehouse. Demand from Indian consumers also remains at a low level against the background of the preserved active import of steel rental, adds Mr. Kotov. In his opinion, the price bottom for coking coal is already close.
With current quotes, more than 10% of world trade at sea is unprofitable, says Ahmed Aliyev BCS analyst. Russian exports from Kuzbass are lossful, negative profitability is estimated at about 20%. “The industries are required for the economy of foreign supplies from the region at least to zero,” Mr. Aliyev is sure. The director of the corporate ratings group, Akra, Ilya Makarov, notes that the industry has always been exported oriented. Russia consumes less than 50% of the coals, and the production of steel in the country is reduced (see “Kommersant” of March 3). The domestic demand for coking coal will be reduced by evaluated by 5% due to the predicted decrease in steel and high lending rates, the director of the NCR agency NCR Nariman Tayketaev expects.
On March 18, the Ministry of Energy reported the presentation of the anti -crisis program for the coal industry, the main tasks of which are to maintain export volumes and attract investments for stable production. According to Kommersant, the current situation threatens to reduce coal production in 2025 by 39 million tons, to 399.6 million tons, export – by 29.4 million tons, up to 166.5 million tons. One of the key points of the program can be stimulating transportation to southern and western ports, for which it is proposed to allocate 73 billion rubles. and 28 billion rubles. subsidies, respectively (see “Kommersant” of March 19).
The Russian Railways JSC told Kommersant that, taking into account the capabilities of the infrastructure, technological measures are being carried out for the removal of the maximum volume of goods in areas with a deficit of secrecy ability. The company recalled that from January 1, coal exports are carried out in accordance with the priority provided for by the rules of non -discriminatory access. For 17 days of March, Russian Railways reported, coal exports to the south grew by 58.3%, to the east – by 0.3%.
“Regardless of whether they will take the load to the west or east, the main volumes will be directed either to China or India,” says Yevgeny Grachev, director of the Center for Price Indexes (CCI). According to him, the markets of Southeast Asia, such as Vietnam or Indonesia, have been offered relatively higher prices for metallurgical coal. In early March, according to the CCC, the metallurgical coals of PCI (pre -chopped carbon powder) in these markets cost $ 10-12 per ton more expensive than in China. But, Mr. Grachev points out, taking into account the difference in the cost of freight, the benefit in non -back will be more modest, and the limited capacity of these markets will not allow China and India.
According to Nariman Tayketaev, taking into account the decrease in Chinese demand, the expected surplus of coal coal in the global market will be 15–20%, and this year will be at the level of $ 140–180 per ton. The head of the analytical department of “RIMO-TRAST” Oleg Ablev says that at such prices, some of the marginal margin of majority will still be: production will cease to be profitable at a price below $ 120 per ton.
