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German coal importers say can handle Russian ban at a price
Global Banking & Finance Review®
Company
By Vera Eckert
FRANKFURT (Reuters) – German coal importers’ group VDKi on Wednesday said the country should be able to find alternatives to Russian hard coal imports by the peak demand winter season, but there will be technical issues and increased costs.
European Union ambassadors were on Wednesday debating new sanctions, including a ban on coal imports, in response to Russia’s invasion of Ukraine.
“Coal procurement along sea routes can be changed, however at higher prices,” the association’s chairman, Alexander Bethe, said in a statement in reply to an enquiry.
“A conversion to alternative coal qualities is not unproblematic for the power plants. However, it should be possible to completely dispense with Russian coal by next winter,” he said.
Germany imported around 18 million tonnes of coal for steelmaking and power generation from Russia last year, relying on the country for 53% of total supply and with the volume accounting for 2% of global seaborne trades.
VDKi said bottlenecks in Russian supplies had since late last year prompted importers to seek alternatives, including from Australia, Colombia, Indonesia, Mozambique, South Africa and the United States.
The group did not say how much more alternative supplies would cost.
Southwest Germany’s EnBW, which bought 3.6 million tonnes of Russian coal last year for its power and heat operations, 86% of its total intake, said it has stocks “that will reach far into the current year.”
It also said it was speeding up purchases from alternative producer countries and the situation regarding a potential loss of Russian supplies was “under control”.
Mentioning similar suppliers as those identified by VDKi, the company said it was looking into the suitability of potential new delivery partners and whether their coal’s quality was suited to its plants.
Benchmark coal prices for delivery to Europe in 2023 are at just under $197 a tonne, Refinitiv Eikon data showed. This is below a $250 contract high in early March when the fear of shortages in case of embargoes was first reflected, but nearly treble the price a year ago.
(Reporting by Vera Eckert, editing by Barbara Lewis)
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