Russia redirects coal exports to Asia amid discounts and logistics constraints

By Dominikus

Russia is increasingly redirecting its coal exports դեպի Asian markets while offering significant discounts to remain competitive, as logistics constraints and the loss of European buyers reshape its trade flows, an industry executive said.

Since 2022, Russia has shifted exports toward Asia, particularly China and India, following reduced access to European markets, according to Daniil Bychkov, head of coal strategy at SUEK, speaking at an industry conference on March 19.

The reorientation has been accompanied by price reductions, with Russian coal trading at about 25% below FOB Newcastle benchmarks in Asian markets and at discounts of up to 35% in Atlantic markets.

Despite the pivot, overall export performance remains lower than pre-2022 levels. Russia’s coal exports in 2025 were about 11% below 2021 volumes, reflecting the loss of higher-value markets and ongoing geopolitical disruptions.

Exports to China have increased by around 65% compared with 2021 levels, although growth has recently stabilized as China boosts domestic production and reduces import demand.

 “Coal mining in Russia is shifting eastward, closer to ports and key Asian markets,” Bychkov said, referring to efforts to improve access to buyers in the region.

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Logistics remain a key constraint. Major coal-producing regions such as Kuzbass are located far from export terminals, resulting in high rail transportation costs and limiting shipment profitability, particularly for long-distance exports.

Rail capacity is also a limiting factor. While exports through eastern ports have increased, further growth depends on infrastructure expansion, including development of the Eastern Polygon rail network.

At the same time, the composition of Russian coal supply is changing. Output of high-calorific export-grade coal has declined, while overall supply remains abundant, adding pressure on producers to compete on price.

Russia’s discounted coal has intensified competition in Asian markets, particularly in the thermal coal segment where it competes directly with Indonesian supply.

Russian exports have also expanded into new markets such as Vietnam, Malaysia and Sri Lanka, reflecting efforts to diversify beyond traditional buyers.

For Indonesian producers, increased competition from discounted Russian coal is expected to add pressure on margins, particularly in medium- and high-calorific segments.

Russia’s coal exports are expected to remain focused on Asia, although growth is likely to be constrained by logistics limitations, pricing pressures and shifting demand patterns.

Editing by Alexander Ginting