(Bloomberg) -- China is losing its appetite for Russian coal as import taxes and logistical snarls push Asia’s biggest buyer to cheaper alternatives.

Russian exports plunged 22% in the first quarter after Beijing imposed a tax regime at the start of the year that favors some of Russia’s rivals. The higher costs have been compounded by an increase in tariffs on Russian railways amid limitations on capacity, the China Coal Transportation and Distribution Association said in a note. The Kremlin’s surcharge on exports to help fund its war in Ukraine has also hindered competitiveness.

Russian sales to China increased sharply last year to top 100 million tons, firmly establishing the nation as No. 2 supplier to its strategic partner just as Chinese imports were surging. China’s coal purchases rose another 14% year-on-year in the first three months, but it’s exporters in Australia and Mongolia that are reaping the most benefit.   

Imports could soften in April as domestic miners cut prices in the off-season and the Chinese economy struggles to gain momentum, CCTD said. Increased availability of hydropower, particularly after torrential rains in the south of the country, is also likely to reduce coal demand.

On the Wire

Sungrow Power Supply Co., one of the biggest solar sector companies, reported full-year earnings jumped 163% as its higher-margin products avoided the worst of a wider clean energy downturn.

A little-known Australian company is becoming the Western face of a Chinese nickel behemoth.

China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth. 

The US foreign aid package likely to become law this week contains new sanctions on Iran’s oil sector aimed at China.

China’s $400 million deal with Niger to pay for oil in advance will help the West African nation’s junta pay debt it’s accumulated since a military coup last year.

WH Group Ltd. — the owner of US-based Smithfield Foods — saw profits rise in the first quarter as a “substantial improvement” in its US operations more than offset a decline in homeland China. 

The Week’s Diary

(All times Beijing unless noted.)

Tuesday, April 23:

  • SMM Copper Industry Conference and Expo in Hangzhou, day 2

Wednesday, April 24:

  • US Secretary of State Antony Blinken visits China
  • CCTD’s weekly online briefing on Chinese coal, 15:00
  • SMM aluminum conference in Chongqing, day 1
  • SMM Copper Industry Conference and Expo in Hangzhou, day 3
  • EARNINGS: CGN Power, Trina Solar, China Coal, HKEX

Thursday, April 25:

  • US Secretary of State Antony Blinken visits China
  • Beijing Auto Show, through May 4
  • SMM aluminum conference in Chongqing, day 2
  • EARNINGS: Cnooc, China Oilfield, TCL Zhonghuan, Chalco, Jiangxi Copper

Friday, April 26:

  • US Secretary of State Antony Blinken visits China
  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30
  • EARNINGS: Baosteel, Hesteel, GEM, Anhui Conch, Shenhua, Goldwind

Saturday, April 27

  • China industrial profits for March, 09:30

Sunday, April 28

  • EARNINGS: Sinopec, Ming Yang, Tongling Metals

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