Time is running out for ships to lift coal cargoes from Russia and complete voyages to Europe before a European Union ban comes into force in August.
European buyers are scrambling to stockpile coal as a cost-effective way to meet the continent’s energy needs. But this requires setting aside moral concerns over trade with Russia.
It is currently still legal for shipowners to lift Russian coal from non-sanctioned entities at ports outside of the Black Sea.
May is not yet over, but already monthly shipments of Russian coal bound for Europe have hit a five-year high, according to data from S&P Global Market Intelligence.
Pranay Shukla, the firm’s associate director of maritime & trade research and analysis, said Russian coal exports to Europe in May are expected to total 4.8m to 5m tonnes, which will keep them above five-year-high levels.
“European buyers, in an attempt to restock coal, are even buying cargoes from the Russian Far East terminals,” he told TradeWinds.
Russian coal shipments to Europe in March surged to 4.7m tonnes, up from 3.5m tonnes in February, the S&P data shows.
The monthly volume increased in April to 4.8m tonnes, even though there was one day less of loading that month.
“With a rush from Russian suppliers to fulfil existing contracts before the EU ban in August, European utilities are also hunting for cargoes from their usual origins like Colombia, USA and South Africa, but also from as far as Australia,” Shukla said.
“The rush to buy coal cargoes is also on fear of natural gas shortage in case Russia cuts off gas to other European countries after halting to Poland and Bulgaria.”
Voyage data compiled by bulker tracking platform Oceanbolt shows at least six bulk carriers have loaded coal in Russia this month for end-users that appear to be European power stations.
A capesize, kamsarmax and panamax owned by Oldendorff Carriers together discharged around 266,400 tonnes of thermal coal in Wilhelmshaven in northern Germany this month.
The coal was loaded at the Baltic port of Ust Luga on board the 121,300-dwt Roland Oldendorff (built 2011), 81,300-dwt Kilian Oldendorff (built 2020) and 74,500-dwt Trina Oldendorff (built 2013) in early May.
Wilhelmshaven is the import hub for the nearby coal-fired power plant operated by Onyx Power, part of US private equity firm Riverstone Holdings.
Onyx bought the 726-MW plant in 2019 from Engie, previously known as GDF Suez, which has divested almost all its coal business in Europe.
Elsewhere in Germany, the 79,335-dwt panamax AP Jadran (built 2012), which is controlled by Croatian owner Atlantska Plovidba, discharged thermal coal from Ust Luga at Rostock this month.
It unloaded at Kraftwerks und Netzgesellschaft’s coal berth, suggesting that the cargo is for the power company’s nearby 514-MW, hard-coal-fired power plant.
Oceanbolt data shows that another Atlantska Plovidba kamsarmax, the 80,300-dwt Zagreb (built 2008), is currently waiting to discharge to Rostock and is laden with coal from Ust Luga.
Italian utility Enel has also received Russian thermal coal from Ust Luga this month. The 80,900-dwt kamsarmax CL Daliao He (built 2020) unloaded at Enel’s power plant coal berth at Civitavecchia in western Italy in mid-May. The vessel is controlled by Singapore-based Chinese owner Sumec Ocean Transportation.
Another kamsarmax is on its way to Civitavecchia with Russian coal, probably for Enel again. Globus Shipmanagement Corp’s 81,800-dwt Orion Globe (built 2015) left Ust Luga on Thursday, laden with 76,400 tonnes of coal, according to Oceanbolt data.
Overall, Oceanbolt shows that 32 bulkers have completed loading 2.2m tonnes of coal in Russia this month for discharge in Europe.
Germany is the top destination, accounting for 808,500 tonnes.
The Netherlands will receive the second-largest volume, 545,300 tonnes.
The next biggest European consumers of coal loaded in Russia this month are Italy, Belgium, the UK, Denmark and Spain.
Earlier this week, a bulker was fixed to carry Russian coal to China at an eye-watering rate for capesizes, as TradeWinds has reported.
Broking sources said a European commodity trader fixed the 177,900-dwt Transworld Navigator (built 2010) at $170,000 per day for a voyage from the port of Vanino in the Russian Far East.
The ship is managed by Stealth Maritime, founded by Nikolaos Vafias.
The identity of the charterer and the exact details of the voyage remain unknown.