EU countries hunt for global coal stocks as Russian ban looms By Reuters

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By Jonathan Saul

LONDON (Reuters) – European patrons are growing shipments of coal from throughout the globe in opposition to a backdrop of a proposed European Union ban on Russian imports and the scramble to alleviate tight gasoline provides, in response to knowledge and delivery sources.

The European Fee on Tuesday proposed new sanctions in opposition to Moscow over its invasion of Ukraine, together with a ban on shopping for Russian coal and on Russian ships coming into EU ports.

The brand new restrictions come at a time of uncertainty about future gasoline deliveries from Russia to the EU later this month after the Kremlin’s demand that patrons begin paying Russian gasoline large Gazprom (MCX:) in roubles.

In March, European nations imported a complete of seven.1 million tonnes of thermal coal, which is utilized in energy and warmth era, a 40.5% enhance year-on-year and the best degree since March 2019, evaluation from shipbroker Braemar ACM, based mostly on ship monitoring knowledge, discovered.

“Regardless of Russian coal shipments to Europe in March nonetheless persevering with at pre-war ranges, the anticipated alteration in coal flows into Europe has began to indicate,” Braemar dry bulk analyst Mark Nugent stated.

“Shipments from Colombia and the USA have been robust in response to the battle with Atlantic suppliers offering probably the most cost-efficient various for European end-users.”

The EU will depend on Russia for round 45% of its coal imports, 45% of its gasoline imports and round 25% of its oil imports, in response to the European Fee web site.

Braemar knowledge confirmed 3.5 million tonnes of Russian thermal coal have been imported into the EU in March, the best month-to-month complete since October 2020.

On a weekly foundation, March 28-April 1 noticed the best ranges of Russian thermal coal imports because the Feb. 24 invasion started, with 887,000 tonnes of Russian thermal coal imported into the EU, in response to Braemar.

German coal importers’ group VDKi on Wednesday stated the nation ought to have the ability to discover options to Russian onerous coal imports by the height demand winter season, however there can be technical points and elevated prices.

Thermal coal imports from Colombia totalled 1.3 million tonnes in March, rising by 47.3% year-on-year, Braemar knowledge confirmed.

Imports from the U.S. in March totalled 809,000 tonnes, rising by 30.3% year-on-year and at their highest degree since October 2019.

Imports from South Africa additionally picked up with 287,000 tonnes arriving in March versus no shipments in March final yr.

Australia has additionally discovered renewed shopping for curiosity from Europe, with thermal coal imports totalling 537,000 tonnes within the first quarter of this yr, versus no shipments over the identical interval in 2021, Braemar stated.

However Indonesia and Australia, among the many world’s prime coal exporters, have hit their manufacturing limits and are unlikely to fulfill Europe’s demand for extra provides if the European Union bans Russian coal imports, mining executives stated.

“There may be higher concern over the dangers with buying and selling Russian coal (on account of broader sanctions), so that’s already having an influence on shipments,” one delivery supply conversant in the commerce stated.

Though it’s nonetheless costlier to burn gasoline to supply energy than coal, the value of thermal – which is for heating and energy era – has reached all-time highs this yr.

Alex Stuart-Grumbar, dry bulk analyst with delivery consultancy MSI, stated Europe’s must import extra coal from sources additional afield could be constructive for the bigger panamax and capesize delivery segments on long-haul coal commerce routes.

“The preliminary disruption to commerce patterns can be constructive for dry bulk markets, although finally, this may push international coal costs increased, incentivising China and India to supply extra coal domestically,” Stuart-Grumbar stated.