An expert predicted an increase in the exchange volumes of coal trading in Russia

An increase in exchange trading volumes of coal at the St. Petersburg International Mercantile Exchange (SPIMEX) is predicted, as the list of assets will be expanded by adding different coal grades. Nikolay Vavilov, a specialist of the strategic research department of TR, told Izvestia on December 4.

In the first 11 months of 2024, the volume of coal trading on the exchange exceeded the same figure of 2023 five times, SPIMEX reported the day before.

According to Vavilov, the growth in trading volumes is due to the transfer of all stakeholders to a single exchange platform in the country and the establishment of a minimum sales rate.

"The fact is that previously most of the transactions were made directly between suppliers and consumers, and coal prices in the domestic market were tied to the export netback, which was calculated by Argus, an international pricing agency registered in the UK. To determine the netback price, the agency's analysts used coal prices in the ports of North-West Europe and South Korea, from which the cost of freight was deducted," he said.

The expert noted that to calculate the cost of transportation within Russia, the starting point was the Kemerovo region, and the average delivery rate was determined by calculating the transportation of fuel from Kuzbass to the main Russian ports. The expert added that the difficulties in such a calculation methodology and the impossibility of state regulators to influence the coal pricing policy were obvious and in late 2022, the Russian authorities decided to transfer all coal trading to an exchange platform in St. Petersburg, and the Federal Antimonopoly Service (FAS) together with the Russian Ministry of Energy prepared and registered a joint order to establish a minimum standard for sales of D and DG grade thermal coal at exchange trading to exclude unnecessary intermediaries and increase transparency

"Moreover, in the not too distant future, it is predicted that the exchange trading volumes of coal will increase, as currently only D and DG steam coal is traded on the St. Petersburg platform, and in the near future the list of assets will be expanded by adding other coal grades. Thus, Russia was the first in the world to realize the experience of exchange trading of coal on the national market, which was reflected in the recent press release of FAS", - concluded Vavilov.

Earlier, on September 17, Alexander Daniltsev, director of the Institute of Trade Policy at the National Research University Higher School of Economics, told Izvestia that coal has always been an important commodity for Russia, and the demand for it in the country remains. At the same time, according to him, Russian coal is primarily in demand in Asia.