CHINA-RUSSIA: CHINA CUTTING BACK ON COAL IMPORTS FROM RUSSIA IN WAKE OF WESTERN SANCTIONS
|
Reuters (March 1) reported that Chinese traders are scaling back imports of Russian coal as
they struggle to secure financing from state banks worried about potential sanctions after
Russia invaded Ukraine, in early signs of supply disruption from the world's third-largest coal
seller. A China-based trader dealing in Russian coal was quoted saying "Most banks have
stopped issuing letters of credit after the SWIFT sanctions. As almost all contracts are dollardenominated, we have no other way to make the payment." China is Russia's largest coal buyer,
taking in more than 50 million tonnes of coal worth $7.4 billion last year via rail and sea from
Russia's Far East. Russia accounted for roughly 15% of China's total imports and was its second
largest supplier behind Indonesia. It said while some buyers could eventually resort to using
China's onshore clearing and settlement system, known as CIPS, overall purchases by China
have been muted since last week after Beijing cut the domestic price cap that makes coal
imports largely uneconomical.
|