Coal skyrocketing: Europe turns to South Africa
After the Russian invasion of Ukraine, European energy buyers are scouring the world as far as South Africa for coal, as the Russian invasion of Ukraine and the threat of further sanctions on Moscow have made Russian coal unsaleable with many European utilities. Meanwhile, the price has reached historic highs for fossil fuel, with price increases of the order of 15% in a single day.
Several coal-carrying cargo ships have departed from the Richards Bay specialty terminal in South Africa heading west and rounding the Cape of Good Hope since last week, according to ship tracking data Bloomberg compiled. It is not the typical route of South African production which is usually headed east.
The Russian invasion of Ukraine, however, changed the trade routes for many commodities, including coal. Merchants and utility companies have begun to steer clear of Russian marine commodities, including crude oil, LNG and coal, as many companies are now in "Auto Sanction" mode and avoid Russia.
Coal flows from South Africa, the United States and Colombia to Europe have increased in recent weeks, Bevan Jones, chief executive of African Source Markets consultants, told Bloomberg.
This strategic shift in supplies is skyrocketing the price of coal which has spiked 15% in a single day
“European thermal coal prices have risen to record highs with future prices above 400 USD / t through the fourth quarter of 2022. Some buyers in Japan and Europe have already indicated that they are looking to replace Russian supply and coal. Non-Russian thermal in Europe is attracting a significant premium over Russian material, ”Wood Mackenzie lead analyst Rory Simington said Thursday. The scarcity of railway lines to the east would then constitute a limit to the possibility of exporting coal from Russia to China, which, among other things, is already supplied at very affordable prices from Indonesia.
What we are witnessing is a painful rebalancing of global energy supply lines.
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The article Carbone to the stars: Europe turns to South Africa comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/carbone-alle-stelle-leuropa-si-rivolge-al-sud-africa/ on Sat, 05 Mar 2022 09:00:58 +0000.