Coal cargoes will arrive this month, followed by crude oil in May
© Getty Images / Richard Rigney / EyeEm
Russian coal and oil paid for in yuan is about to start flowing into China, Bloomberg reported on Thursday.
According to the media outlet, citing Chinese consultancy Fenwei Energy Information Service, several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month.
These will be the first commodity shipments paid for in yuan since the United States and Europe hit Moscow with unprecedented sanctions, cutting several Russian banks off from the international financial system.
Traders said that Russian crude sellers have also offered Chinese buyers the flexibility to pay in yuan. The first cargoes of the ESPO grade bought with Chinese currency will be delivered to independent refiners in May, people familiar with the purchases told Bloomberg.
According Fenwei, both steel-making and power-plant coal are being paid for in renminbi. These deals are traditionally made in dollars, but many Chinese buyers temporarily halted purchases after Washington and its allies cut off Russian lenders from SWIFT.
Data shows that Russia was China’s second-largest coal supplier last year. Nearly half of the imports from Russia are metallurgical coal.
Chinese buyers are interested in importing more Russian supplies. However, logistics and financing barriers could ultimately cap the flows, the China Coal Transport and Distribution Association said last month.
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