Russia ships record volumes of gas and steelmaking coal to China

China imported record quantities of Russian liquefied natural gas and steelmaking coal in September, as total purchases of energy products topped $50 billion since the invasion of Ukraine pushed Moscow to expand sales to its strategic ally.  

Coking coal imports from Russia jumped to 2.5 million tons in September, from about 900,000 tons in the same month last year and 1.9 million tons in August, according to Chinese customs data. LNG sales rose by a third from a year ago to 819,000 tons, despite a 12% decline in China’s overall purchases of the super-chilled fuel. China hasn’t reported imports via pipelines, the main conduit for Russian gas, since the start of the year.

Crude oil imports from Russia were at 7.5 million tons last month, compared with 8.3 million tons in August and 6.1 million tons a year ago, with Saudi Arabia leapfrogging Russia as China’s top supplier.

Total purchases of Russian energy, including oil products, slowed to $7.5 billion last month from a revised record of $8.4 billion in August, although the figure is well ahead of last year’s $4.7 billion. It brings the total to more than $51 billion in the seven months since the war in Ukraine began. Over the same period in 2021, China’s energy purchases from Russia were $30 billion.

Although import values have been inflated by the global spike in energy prices caused by the war, China is still taking more volumes, sometimes at discounted rates, from Russia. Moscow for its part needs to find a home for exports that are being shunned by much of the rest of the world as punishment for the invasion. A new package of European Union sanctions that will deprive oil tankers of insurance and other services is due to take effect on Dec. 5.

Other data for imports from Russia in September include:

• Coal imports, including both thermal and coking coal, increased 20% on year to nearly 7 million tons
• Refined copper imports doubled to 39,578 tons
• Refined nickel imports slumped 60% to 3,363 tons
• Refined aluminum imports rose more than four-fold to 45,666 tons
• Palladium imports plunged 57% to 265 kilograms
• Wheat imports decreased 45% to 3,431 tons

Events Today

(All times Beijing unless noted otherwise)

• Awaiting China’s Sept. output data for base metals and oil products
• EARNINGS: WH Group, Chalco, Baosteel, Jiangsu Shagang, Tongwei, Huaneng Power

Today’s Chart

The yuan tumbled to its weakest since 2007 after the central bank loosened its grip on its tightly-controlled currency fixing by setting the rate at a 14-year low. That will pile on the costs for commodities buyers, depressing demand at a time when consumption in the world’s biggest importer is already under the cosh because of a slowing economy and Beijing’s Covid Zero policies.

On The Wire

China installed a massive amount of solar panels in the first nine months of the year, nearing the record-setting capacity added in 2021 despite supply-chain disruptions that sent prices soaring. 

Scientists may have discovered a method for making magnets used in wind turbines and electric cars without the rare-earth metals that are almost exclusively produced in China.

• China Commodities Leadership Falters: Elements by David Fickling
• China EV Registrations Rise 10.2% M/m in September
• China’s Steel Stockpiles Expand Again in Mid-October: CISA
• China’s New Home Market May Recover This Quarter: Sec. Times
• China, Bolivia Sign $350m Financing for Zinc Plant Next Wk: ABI
• Chinese Bank Loans Will Help GDP Growth in Fourth Quarter: Daily
• China Lithium Producers’ Profits May Soar With Prices, Output
• Chinese Gasoline to Reach US for the First Time Since 2019

The Week Ahead

Wednesday, Oct. 26

• EARNINGS: China Coal, Xinjiang Goldwind, Eve Energy, Sungrow, CGN Power, Gotion High-Tech

Thursday, Oct. 27

• China industrial profits for September, 09:30
• EARNINGS: Jiangxi Copper, Tongling Nonferrous, Metallurgical Corp. of China, Hesteel, Anhui Conch, PetroChina, Cnooc, China Oilfield Services, JA Solar, Ming Yang Smart Energy, Xinjiang Daqo, Hoshine Silicon, Tianqi Lithium
• USDA weekly crop export sales, 08:30 EST

Friday, Oct. 28

• China's weekly iron ore port stockpiles
• Shanghai exchange weekly commodities inventory, ~15:30
• EARNINGS: Sinopec, China Shenhua, China Three Gorges, Longi Green, Angang Steel, Maanshan Steel, Shandong Steel, BYD, Huayou Cobalt, Ganfeng Lithium, Jinko Solar

Saturday, Oct. 29

• Nothing major scheduled

Sunday, Oct. 30

• EARNINGS: China Yangtze Power, Trina Solar