Russian coal exports hit 6-month low
Thursday, November 3rd, 2022
Russian thermal coal exports declined 11% on the year in October to just under 11m tonnes – the lowest since April – as an EU-wide embargo on imports dented loadings.
The country exported 1.3m tonnes less than in the same month last year, while year-to-date shipments were down 4m tonnes at 120m tonnes, the estimates from the dry bulk data provider showed.
Of the October total, just 0.6% was exported to west European countries – likely coal from Kazakhstan, which is still permitted to be loaded at Russian ports and shipped to EU destinations – compared with over 10% in the same month of 2021.
“This is mainly because of the ban issue,” said a head coal trader with a Swiss trading house.
The EU forbade the import of Russian coal from 10 August in response to the country’s invasion of Ukraine, with European buyers instead sourcing incremental volumes from alternative origins, such as South Africa, Colombia and even Australia.
Russia had previously supplied Europe with 60-70% of its thermal coal needs.
DBX, however, provisionally saw total Russian exports rising to nearly 12m tonnes in November, which one coal analyst with another Swiss trading firm attributed to several factors.
“Freight rates have come down and also the EU said shippers can go to pick up Russian coal to deliver to non-EU countries,” he said, regarding the European Commission’s decision in mid-September to allow EU operators to transport and finance Russian coal earmarked for non-EU member countries.
This was to avoid any impact from EU sanctions on energy security for less developed countries.
Regarding freight rates, the Baltic Dry Index – a barometer for global dry shipping trade – was assessed last at 1,377 points, down more than 20% on the month.
“Also, non-Russian coal can be picked up in Russian ports for [export to] the EU,” said the analyst, with regards to the aforementioned shipments of Kazakh coal.