Montel Magazine 4 - 2020 - Page 24

But for the time being , rail infrastructure constraints around Vladivostok may leave exporters with little choice other than to keep shipping from western ports . Denis Ilatovsky , director of logistics at Russia ’ s largest producer Suek , says while state-owned Russian Railways had taken “ big measures ” to expand infrastructure between mines and eastern ports , more was required . “ The most important thing is to develop export infrastructure as this will play an important role in expanding exports [ to the far east ],” he says .
A source close to one large Russian coal producer , who also asked to remain anonymous , says shipments via the northern route will still increase over the coming years . “ It won ’ t be a big route , but it will get some volume ,” he says , noting exporters with contracted export capacity at Murmansk will need to ship their supplies somewhere , and if the demand is not there in Europe , they may seek Asian customers . However , with Arctic sailings to Asia currently only possible over the summer months , it means such exports are likely to be “ opportunistic ” rather than regular , he says .
“ Maybe after some more global warming , they will be able to sail the route all year around ,” he says , while acknowledging such a prospect was unlikely to be embraced by the PR departments of any coal-exporting firms and adding “ Asian demand for coal may also not be there by then .”
Ust-Luga and Murmansk hiked exports to Asia by a combined 15 % in January-October , as shipments to northern Europe fell by the same percentage , vessel tracking showed . Exports to China nearly doubled compared with the first ten months of last year to 3.65m tonnes , while shipments to India grew 22 % to 1.28m tonnes , according to Montel calculations , based on data provided by shipbroker Arrow . But this mainly reflected long-haul shipments via western Europe , across the Mediterranean and through the Suez Canal .
There is now an increasingly attractive alternative for Russian exporters choosing to serve Mediterranean buyers or ship to Asia via the Egyptian conduit . Russia ’ s coal export terminal at Taman , which is operated by Oteko and came online last year , is located on theKerch Strait in southwestern Russia – between the Sea of Azov and the Black Sea – and has been actively ramping up capacity and exports this year . It plans to expand capacity to more than 4m tonnes / month next year , from 3m tonnes / month at present , amid efforts to boost supply to Mediterranean , north Africa and Asian destinations , as Russia ’ s traditional customer base in northern Europe diminishes .
Already , Taman has seen shipments to Turkey this year soar to 1m tonnes by mid-November . Alexander Gaganov , Oteko ’ s commercial director for bulk and grain business development , says it is the “ most efficient ” terminal for supply to the Mediterranean , with its location and “ state-of-the-art equipment ” giving it a competitive advantage over the northern ports . He also notes Taman is the only port in the Black Sea area capable of loading giant capesize vessels , of up to 220,000 deadweight tonnes . “ Some large Russian producers are already sending capesize vessels with high quality thermal coal to South Korean stateowned energy producers from Taman ,” he says . And the port offers more attractive prices compared with competing suppliers to the Mediterranean , namely Colombia , which has been Turkey ’ s numberone supplier in recent years .
Turkish demand for Russian coal has been bolstered this year by a sharp decline in total Colombian exports so far , due to protracted strike action at Colombia ’ s Cerrejon coal-mining complex and the suspension of operations at the country ’ s Prodeco and CNR mining firms . But Russia may still retain or increase its share of the Turkish market next year and beyond , says the source with a Russian producer , noting Taman could become one of Russia ’ s main coal export ports . He says the Russian government is encouraging loadings at the terminal through rail-tariff discounts – between mines and the port – while port costs have been lowered from uncompetitively high levels when it first came online in March 2019 . “ Before , it was not competitive [ with other ports ], but now it can work ,” he says . VDKi ’ s Wodopia also says there are “ clear freight advantages ” in shipping coal from Taman to destinations in the eastern Mediterranean and the Black Sea , but also to Asia . According to port schedules , obtained by Montel , Turkey was the main destination for Taman ’ s exports in the third quarter , accounting for 0.72m tonnes of the 2.3m-tonne total , followed by China with 0.55m tonnes and Israel with 0.17m tonnes . Lesser volumes were exported also to India and Romania .
Nevertheless , there are still some drawbacks for exporters . Russian writer Mikhail Lermontov nearly 200 years ago described Taman as “ the nastiest ” of all Russia ’ s sea towns , due in no small part to poor weather conditions , and it seems sentiment – and the climate – has changed little over the years .
“ It ’ s a weather port ,” says the coal trader , referring to Taman . He points out that high port costs and poor weather conditions remain a deterrent for some potential exporters . “ As soon as high winds blow , all ships have to leave the berths .” n
Montel Magazine 4 – 2020