According to FISU’s data, over January-August, Russian coal deliveries to China fell 10.8% year-on-year, to 53.15 million tons.

“Russia has lost its place among the largest suppliers. Imports from Mongolia over this period grew 48.9%, to 78.39 million tons, while supplies from Indonesia reached 121 million tons. In total, China imported 310 million tons over eight months,” the agency noted.

As FISU noted, Mongolia is increasing deliveries thanks to significantly cheaper logistics and zero tariffs. A shared land border with China gives it an advantage over Russian coal from Kuzbass, which is shipped via the overloaded Eastern Polygon railway. Import tariffs on Russian coal in China remain at 3-6%, while Mongolia, as well as Australia and Indonesia, enjoy zero rates under free trade agreements.

Intelligence data shows Russian companies are already offering discounts of around 10%, but there’s practically no room left for further price cuts. Bigger discounts would mean selling at a loss. So even with current price concessions, Russian suppliers will struggle to hold onto their share of the Chinese market, with Mongolia remaining the main beneficiary of this process.

Thermal coal exports could be hit hardest in the near term. They’re under simultaneous pressure from competition with Chinese mines, import tariffs, and rising transport costs. Starting in October, railway tariffs in Russia are rising again, while demand for gondola cars is driving up the cost of using them.

According to FISU, the cost of shipping coal from Vostochny port to China rose 45.5% from the start of the year to September 11. In September, the profitability of thermal coal exports from Kuzbass via Far East ports rose 30% compared to August, and threefold compared to last year.

The problems extend to other directions as well. Over seven months, Russian exporters cut coking coal deliveries to Turkey by 30%, and in July shipped no batches there at all. One reason cited is the complication of shipping in the Black Sea.

In July, coal shipments to Russia’s southern ports fell 33% compared to June. Besides problems with Black Sea logistics, deliveries are under pressure from rising railway tariffs and the high cost of transshipment through Northwest ports.

“Russian coal companies are simultaneously losing their competitive edge in foreign markets and facing rising costs domestically. They can no longer lower prices further without risking operating at a loss, and more expensive shipping is squeezing an already limited margin. In the Chinese market, this is already showing up as a decline in Russian deliveries, while competitors increase their volumes,” FISU states.

As previously reported, Russians have sharply increased transfers of funds to foreign brokerage accounts, trying to move capital out of the country before it becomes impossible to do so.

Published Date:2026-10-07