CHINA'S coal imports from Russia rose in August, exceeding last month's level and hitting the highest in at least 5 years, as power utilities in the world's biggest coal consumer sought overseas supplies to meet soaring demand in extreme hot weather.
Arrivals of Russian coal last month reached 8.54 million tonnes, up from the previous peak of 7.42 million tonnes in July and 57 per cent higher than in the same period last year, data from the General Administration of Customs showed on Tuesday (Sep 20).
The monthly figure was the highest since comparable statistics began in 2017.
Imports from Russia have surged in recent months as Europe suspended purchasing from the country after it sent tens of thousands of troops into Ukraine, forcing Russian coal to be traded at a steep discount.
Prices for Russian coal have climbed as both China and India stepped up buying, traders said, but were still cheaper than the domestic coal of same quality.
Russian thermal coal at 5,500 kcal on delivery basis to China was assessed at about US$155 a tonne in late August, up from about US$150 a tonne a month earlier.
As severe drought and heatwave hit western and southern China from late July, coal-fired power plants geared up production to meet the spiking demand for air conditioning and the supply gap from hydropower stations.
They also increased purchases of higher quality thermal coal, such as Russian coal, to improve electricity generation efficiency.
China brought in 15.82 million tonnes of the dirty fuel from its top supplier Indonesia in August, 35 per cent higher from July, data showed.
But that was still lower than the 17.3 million tonnes imported in August last year.
The increase of Indonesian coal purchases came as lucrative prices encouraged utilities to place more orders. In August, Indonesian 3,800 kcal thermal coal was about 170 yuan (S$34.13) a tonne cheaper than the same quality Chinese coal, and 4,700 kcal coal was 140 yuan lower.
Power utilities are expected to increase imports in October to replenish stocks ahead of the kick-off of the heating season in most of northern China in mid-November.
However, as renminbi depreciation continues, imported coal will become more expensive for Chinese buyers and potentially dent demand. REUTERS