Page 9 - AfrElec Week 10 2022
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AfrElec COAL AfrElec
Europe eyes South Africa
as coal supplier following
Russia sanctions
SOUTH AFRICA EUROPEAN buyers of coal are beginning to show that several coal cargo carriers are heading
turn to other global suppliers, looking as far as west around the Cape of Good Hope from the
South Africa, in the wake of Russia’s invasion of Richards Bay coal terminal.
Ukraine. Traditionally South Africa ships over Many companies and countries have made
86% of its coal to Asian markets. Last year, of the their own decisions to stop trading with Russian
59mn tonnes of coal dispatched from the Rich- suppliers amid concerns over transport disrup-
ards Bay Coal Terminal, only 4% went to Europe. tions, reliability of supply chains and possible
The trade in energy commodities has started escalation of sanctions. As a result, energy com-
to see disruptions since the introduction of modity prices are surging in Europe and Asia.
the SWIFT restrictions against Russian banks. Last week, coal prices spiked to record highs as
While the energy sector was not specifically the Russia-Ukraine conflict escalated.
targeted, the sanctions have affected exporting “European thermal coal prices have surged to
capabilities from Russia. According to OilPrice, record highs with futures prices above $400 per
the threat of further sanctions has made Russian tonne until Q4,” Wood Mackenzie principal ana-
coal unsellable with many European buyers. lyst Rory Simington said. “Some buyers in Japan
According to Bevan Jones, CEO at African and Europe have already indicated they are look-
Source Markets, coal flows from South Africa, ing to replace Russian supply, and non-Russian
the US and Colombia to Europe have increased thermal coal in Europe is attracting a significant
over the past few weeks as European utilities premium over Russian material.”
have ramped up volumes. Vessel-tracking data
Week 10 10•March•2022 www. NEWSBASE .com P9
