Imported coal is seen lifted by cranes from a coal cargo ship at a port in Lianyungang, Jiangsu province, China July 26, 2018. Picture taken July 26, 2018. REUTERS/Stringer/File Photo
(Bloomberg) Russian seaborne coal exports were effectively halted by a European Union ban on entities within the 27-nation bloc servicing shipments of the fuel to anywhere in the world.
Suek JSC, Russia’s largest thermal coal miner, was unable to ship the fuel since mid-August, according to people familiar with the situation who asked not to be named because the matter is private. The insurance and reinsurance markets are dominated by EU, UK, and Swiss companies, making it hard for shipowners to find cover, the people said.
An EU ban on imports of Russian coal and other goods into the bloc started on Aug. 10, following a wind-down period of four months. In a clarification earlier this month, the European Commission said the sanctions also prohibit EU operators from providing services — such as financing and insurance — to all shipments of such products originating in Russia.
While Russian coal miners started re-directing volumes to Asia long before the ban came into force, the shipowners typically reinsure their risks with bigger providers that can no longer cover such exports. The companies are looking at other options, but those will be costly and take time to implement, the people said. That will drive prices even higher, they said.
Coal Prices via Bloomberg
Russia is one of the world’s top three coal exporters, controlling about 17% of the global shipments. The coal industry accounts for only about 1% of the Russian economy.
As Russia re-directed its coal to Asia, including India, exporters like Australia have replaced the volumes in Europe. That’s fueled higher prices, which have already gained 10-fold over the past year.
“The coal ban may also lead to the global price increase for other energy sources like LNG as it is all connected and Europe is increasing demand,” said Dmitry Smolin, an analyst at Sinara Investment Bank.
In Europe, wholesale energy prices have soared to more than 10 times their seasonal average over the past five years as Russia squeezes gas deliveries and power-plant outages sap supply.
The EU clarification also included some types of fertilizers. However, because the EU permits the import of set quota-based volumes of certain Russian fertilizers, it didn’t affect the situation much, people said. Still, even before August, it was more difficult find a ship or insurer for such cargoes, they said.
Suek’s press service as well as the biggest Russian fertilizer makers declined to comment.
By Andrea Shalal (Reuters) – U.S. Treasury Secretary Janet Yellen on Saturday spoke of the “unspeakable cruelty” and enduring consequences of the trans-Atlantic slave trade, but said she was heartened...
By Alex Longley (Bloomberg) After months of planning and negotiations, the biggest tranche of sanctions on Russian oil to date take effect on Monday. How big their impact will be remains...
By Vanessa Dezem (Bloomberg) Germany’s plans to start imports of liquefied natural gas this month are at risk of being derailed by the weather. Strong wind, freezing temperatures, high waves —...
December 4, 2022
Total Views: 1708
Sign Up Now for gCaptain Daily
Just enter your email and get hot news every morning
SIGN UP
Get the latest gCaptain articles and breaking news
Sign up for gCaptain Daily
Get the latest gCaptain articles and breaking news
We use cookies on our website to give you the most relevant experience. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
{"Tags":["coal","energy crisis","russia sanctions"],"Categories":["News"],"Excerpt":"(Bloomberg) Russian seaborne coal exports were effectively halted by a European Union ban on entities within the 27-nation bloc servicing shipments of the fuel to anywhere in the world. Suek..."}