While gas and oil might have garnered more headlines, the commodity that has seen the greatest changes in seaborne trades and volumes this year in the wake of the invasion of Ukraine looks like being coal.
The price of coal has tripled this year and old mining communities have been resuscitated as Europe in particular seeks alternative energy supplies outside of Russia.
The International Energy Agency (IEA) is now predicting an all-time-high coal demand this year of about 8bn tons after an increase in requirements last year of 5.8% year-on-year. This comes despite projected negligible growth in seaborne imports into both China and India with both countries ramping domestic production a great deal this year.
Global competition for non-Russian coal is growing
“The global total would match the annual record set in 2013, and coal demand is likely to increase further next year to a new all-time high,” the IEA’s latest Coal Market Update said.
Meanwhile, the full ban on imports of Russian coal into the European Union is only days away, with the competition for alternative sources set to continue to increase.
“The continued problems with the flows of Russian natural gas through the pipelines to Europe are also contributing to European demand for the dirtiest of fossil fuels increasing,” chartering platform Shipfix noted in a recent markets report.
An untypical spike in discharge volumes in the Antwerp Rotterdam Amsterdam (ARA) zone saw the number of ships waiting to discharge hit a six-year high at around 120 by early June, according to data from BRS.
“While it had a sharp correction subsequently, there’s a high chance of the phenomenon reoccurring again as Europe braces itself for the upcoming winter ahead while weaning off its structural dependance on Russia’s fossil fuels,” BRS forecast in a new dry bulk report.
It is not only Europe that is looking to replace its imports of Russian coal. Japan, one of the world’s largest importers of the commodity, has seen dwindling cargo order volumes for coal originating in Russia in recent months, according to Shipfix, who noted: “The development will add to the growing global competition for non-Russian coal, with prices likely to continue on an upward trajectory.”
