Russia's Coal Exports Remain Unprofitable

 Despite the sharp rise in global coal prices triggered by the Iran-US conflict, it has not pushed Russian coal exports into the profit-making sector. The positive effects were offset by the appreciation of the ruble, the annual increase in freight rates by the Russian Railways Company (RZD), higher shipping rates due to the tense situation in the Persian Gulf, increased production costs, and other logistics expenses.

 In this situation, the export of thermal coal from the main coal-producing region of Russia, Kuzbass, through all routes, including transshipment to ports in the Far East, is not profitable.

 Since 2024, the Russian ruble has appreciated by 17%. Considering the exchange rate dynamics in May 2026, the exchange rate at that time reached 71.37 rubles per dollar (as of May 29, 2026), with the ruble appreciating by 23% (compared to the 2024 level as 100%). This exchange rate dynamic is extremely unfavorable for Russian coal companies, as production costs rise and the costs of coal rail transportation also increase.

 Even with global prices rising, the strength of the ruble and the increase in domestic railway freight rates have brought the industry to the brink of bankruptcy.

 Coal producers continue to bear the fixed costs of mining, maintenance, and wages. Discontinuation of production often results in greater losses than exporting at a loss-making price.