China’s imports of Russian coal in July hit a 5-year high as the West avoided Moscow

China’s imports of coal from Russia jumped 14% in July of the previous year to at least five-year highs, as China bought discounted coal while Western countries bought Forsaken Russian shipments because of its invasion of Ukraine.

Data from the General Administration of Customs showed on Saturday that China brought in 7.42 million metric tons of coal from Russia last month. This was the highest monthly figure since similar statistics began in 2017, up from 6.12 million metric tons in June and 6.49 million metric tons in July 2021.

Western countries had been avoiding shipments from Russia before the European Union’s ban on Russian coal took effect on August 11, aimed at slashing the Kremlin’s energy revenue during its February invasion.

The ban forced Russia to target buyers such as China and India and sell at a steep discount.

Russian thermal coal with a heating value of 5,500 kilocalories (kcal) was trading at around $150 per metric ton on a cost and freight basis in late July, while coal of the same quality in the Australian Port of Newcastle was valued at over $210 per metric ton on a FOB basis. (FOB).

Some Chinese traders expect more Russian coal to flow into China in the fourth quarter when utilities in northern China build up stocks for the winter heating season.

July shipments of Indonesian coal, which is mostly cheap, low-quality pyrocoke with a heating value of less than 3,800 kcal, reached 11.7 million metric tons. That was up 22% from June but down 40% from the previous year. China has reduced its overall imports of coal in recent months amid rising domestic production.

Power plants in southern China increased bids for Indonesian coal in August because it is cheaper than domestic coal, while demand for coal power generation was boosted by a record heat wave.

Indonesian thermal coal changed hands with a heating value of 3,800 calories at about $78 per metric ton on a FOB basis last week, which would still be less than about 690 yuan (about $100) for domestic coal when considering shipping costs.

Chinese customs data showed no coal shipments from Australia in July.