Russian coking coal exports struggle to reach potential Report

Insight 29 April 2016

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Report summary

Despite the support from the weak Rouble, Russian metallurgical coal exports failed to grow in 2015. The key factors limiting growth were a combination of higher margins for domestic sales, stable domestic demand, and tightening supply. Weak demand in the international market was another fundamental constraint. We expect these factors will continue affecting Russian metallurgical coal exports in 2016.

Executive summary
The weak Rouble advantage in 2015 failed to translate into stronger exports
- Port infrastructure not a constraint in 2015
- Stronger domestic margins keep coal at home
  - Domestic prices supported by Rouble devaluation, strong demand and supply issues
  - Domestic sales margins are higher
- Low demand for imported coal
Outlook for 2016: A surge in Russian exports is unlikely
- Domestic supply will remain tight this year
- Cost increases making future exports uncertain
- Demand in key markets is flat or falling
Conclusion