The situation in the coal industry

Alexander Titov, Senior expert at the Energy Department of the Institute for Energy and Finance, commented on the Russian coal industry development in 2024 and its prospects for 2025 to the Unplanned Economy Internet portal:

“It was a difficult year for the industry, much more difficult than 2023. This can be seen in the profitability indicators. The share of profitable companies in January-August 2024 was 48% against 60.7% a year earlier, and unprofitable companies – 52% against 39.3%.

We expect production in 2024 to decrease by 2% to 435 million tons, while exports will drop much more by 8% to 195 million tons.

In the first half of 2024, the main problem was record low export prices, and in the second half of the year, problems with coal export on the Russian Railways networks worsened (lack of locomotive traction and crews, difficulties in approving applications, defending the empty fleet and rising tariffs).

I look at 2025 rather neutrally. On the one hand, it is easier to push off from the bottom of 2024 and show better results, especially since prices are higher now than in the first half of 2024. On the other hand, I do not see any drivers of growth in demand for Russian coal in the global market: China showed record imports this year and is unlikely to grow so much next year; India is increasing production to curb the growing demand for imported coal; and Turkey is holding steady, although there is potential for an increase in the share of Russian coal there. There are difficulties with the global demand for steel, and hence with the demand for metallurgical coal."