European power utilities start bidding for SA coal

Coal traders try to buy from anyone but Russia.
Coal stockpiled for export stands at the Richards Bay Coal Terminal, South Africa's largest coal-export facility. Image: Nadine Hutton/Bloomberg

European coal surged to historic highs as sanctions against Russia for its assault on Ukraine tighten the global market, driving traders to look elsewhere for the commodity.

The sanctions have triggered intense concerns over the ability of European utilities to get their hands on coal from Russia, which supplies more to the region than any other country. Even with the continent’s coal stockpiles at a historic low, high natural gas prices mean it’s still more profitable to burn coal than gas to produce power.

Read: Hybrid warfare is on the rise globally

Benchmark annual futures jumped as much as 32% to $200 a ton on Tuesday, the highest since 2008. Month-ahead prices rose as much as 38% to hit a record high of $322.50.

Many European utilities have started bidding for coal in South Africa as they are concerned they won’t be able to get supplies from Russia, according to one coal trader who wasn’t authorized to speak publicly. Last week, EU coal stock levels dropped to as little as 2.56 million tons, the lowest since Argus Media started compiling figures in 2014.

“We believe that Colombia and South Africa and some current U.S. supply will react first to the immediate need for any replacement tons in Europe,” said Wendy Schallom, senior coal and power analyst at S&P Global Platts.

“Should the conflict and disruption last longer, however, it will be the U.S. which will need to ramp up exports to supply the bulk of the replacement tons – as they have renewed ability to bring back additional production,” she added.

As European gas prices surge due to supply fears triggered by the war and related sanctions on Russia, the continent’s utilities are eager to source gas and coal from alternative markets.

“We have business relationships with a number of Russian counterparties that we trade with on energy wholesale markets,” Swedish utility Vattenfall AB said in a statement on Tuesday. “For coal we are taking steps to further diversify our sourcing portfolio.” The company sourced coal from Russia, the U.S and Poland between 2018-2020.

However, there are limited alternatives to Russia as sources of coal for European generators. In 2020, 49% of the EU’s imports came from Russia, according to Eurostat, with the majority destined for Germany.

Sanctions come of top of the coronavirus pandemic causing staff shortages in Russia, which has slowed the shipment of coal on the country’s railways. China is also shunning the commodity from Russia. At least two of its largest state-owned banks are limiting finance for Russian commodities due to the sanctions.

© 2022 Bloomberg L.P.

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Who is the actual aggressor and who is the actual victim in this war?

We have to follow the money to determine which nation benefits from this war. Which country reaped the greatest financial benefits from the invasion of Iraq and the recent wars in the Middle East? This war in Ukraine comes at great sacrifice to Ukrainians and at great cost to Europeans. It furthers the economic interests of only one nation. That nation has 750 military bases in 80 countries across the globe.

The nation that stands to gain the most from the war in Ukraine is the same nation that reaped the biggest financial rewards from the 9/11 event.

Ignorance is bliss and naivety is sweet as it helps propagandists to pull the wool over our eyes.

Absolute rubbish, the USA might have many military bases abroad and also have been many times started or got involved in conflicts on flimsy, unjustifiable grounds. And not always fought justified wars, got involved with the wrong leaders, on hindsight and all the rest.
But to think that the USA is behind this Ukraine invasion, and possible occupation for their own super selfish reasons, is nothing more than unfounded, distorted conspiracy thinking. You are grossly misguided on this one.
This invasion is based on completely delusional thinking, reverse blaming of the megalomaniac narcissist in the Kremlin, because he simply cannot emotionally deal with the collapse of his failed USSR,as ex KGB agent.
You are almost as lost, detached from reality as the sole perpetrator of this violence. Take your meds, and go to sleep.

So, international politics is that simple hey? Angels on the left and crazy lunatics on the right. America is the savior and everyone else is the devil. Well, whatever floats your boat.

You are naive if you don’t think that Trump was party to or contributed to the Russian invasion of Ukraine? think of that secret meeting with Putin in Helsinki that no one was able to attend or document? Think of the efforts and shenanigans in trying to get Biden’s son implicated in wrong doing as a director of a Ukrainisn company. Perhaps he was led on by Putin and was oblivious to how he was being used…but you cannot ignore that if America is party to the fall of Ukraine, it all began with Trump.

Oh yes…and don’t forget Trumps offer to buy Greenland at that Helsinki meet with Putin. Greenland with its 18 billion tones of Oil reserves and 200 million tons of coal. Between America and Russia they could have held Europe to ransom for many many years!!!!

I have been reading your comments for years, Sensei. Do I detect a closet conspiracy theorist ….. ? This is your second conspiracy post in a week…..

If a conspiracy theorist is someone who questions the popular narrative, searches for alternative facts, and builds opposing arguments based on evidence, then every forensic detective is a conspiracy theorist.

It is easy to buy the popular narrative. Good trumps evil in that cozy comfort zone. 90% of people simply eat what is dished up for them. That is why the ANC has been in power for 27 years. It is a challenging and lonely place when you begin to think for yourself.

End of comments.

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