Home
FacebookTwitterSearchMenu
  • Subscribe
  • Subscribe
  • News
  • Features
  • Knowledge Library
  • Columns
  • Customs
  • Jobs
  • Directory
  • FX Rates
  • Categories
    • Categories
    • Africa
    • Air Freight
    • BEE
    • Border Beat
    • COVID-19
    • Crime
    • Customs
    • Domestic
    • Duty Calls
    • Economy
    • Employment
    • Energy/Fuel
    • Events
    • Freight & Trading Weekly
    • Imports and Exports
    • Infrastructure
    • International
    • Logistics
    • Other
    • People
    • Road/Rail Freight
    • Sea Freight
    • Skills & Training
    • Social Development
    • Sustainability
    • Technology
    • Trade/Investment
    • Webinars
  • Contact us
    • Contact us
    • About Us
    • Advertise
    • Send us news
    • Editorial Guidelines
International

Coal exports from SA to EU likely because of Ukraine

11 Mar 2022 - by Lyse Comins
Europe's developing energy crisis could stand South African coal exports in good stead. Source: Peter Schrank, The Economist.
0 Comments

Share

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • E-mail
  • Print

South Africa stands to benefit from the spiralling coal price if European states turn to alternative import sources outside of Russia, a global think tank has forecast.

Coal prices soared, hitting $462 per tonne on Thursday, up from $186 just two weeks ago and likely to exceed the $500 mark this year.

And if coal sanctions go ahead against Russia, alternative imports into Europe from South Africa, the United States and Germany may need to be considered.

However, Transnet will need to improve its rail security issues to drive up SA’s import volumes.

This was according to the latest coal price research by Rystad Energy released this week. 

Most of Europe and the wider world have focused on how Russia’s war in Ukraine has impacted oil, gas, and, more recently, nickel prices.

However, relatively little has been mentioned about the coal price shock that is likely to hit the region and spread like a tsunami around the world, Rystad said in a statement.

Russia is Europe’s largest supplier of thermal coal. 

According to Eurostat, last year Russia supplied EU states with 36 million tonnes of thermal coal, representing 70% of total thermal coal imports.

Volumes have remained at this level, but a decade ago Russian coal imports comprised half of these at 35%.

While total power coal demand has been on a declining trend for the last 10 years, coal-fired power generators in Europe have become increasingly dependent on Russian coal and Russia’s market share has grown substantially over time.

“There is simply an almost complete absence of surplus thermal coal available globally. Prices have shot past $400, and the $500 per tonne mark seems to be in play,” said Steve Hulton, vice president of Coal at Rystad Energy.

He said as gas prices continued to soar, European administrations might look to coal to pick up any shortfall in electricity generation as gas usage was scaled back. However, coal consumers will struggle to source additional coal from alternative producers because the supply/demand balance of international seaborne thermal coal is extremely tight.

He said the sky was the limit for prices if sanctions on coal trade with Russia eventuated or if there was a physical disruption to Russian rail/port transportation.

However, at this stage, alternative sources from Colombia, Germany, Poland, South Africa and the US have provided little relief.

Imported coal is generally of better quality and cheaper than any European coal as all the best coal in Europe was mined out years ago. Germany for example, once a coal-mining powerhouse, no longer produces any bituminous coal or anthracite.

The last couple of ‘hard’ or ‘black’ coal mines, were closed in 2018 following years of financial subsidies. 

Poland is Europe’s largest remaining coal producer.

However, the long-term production trend is in decline and while Poland exports some thermal and coking coal to neighbouring EU countries, it has also increased imports of high-energy thermal coal from Russia.

According to Rystad, some of the first places buyers will be calling will be suppliers from Colombia and South Africa.  

South African coal exports have been below planned levels for a number of years.

Exports fell below 60 million tonnes last year, the lowest level in decades as the rail network was severely hampered by theft of copper cable. 

“Annual exports of 70 to 75 million tonnes should be achievable if railway operator Transnet can sort out its security issues,” the research firm said.

Colombian coal production, which is nearly all exported, recovered in 2021 following a large fall in 2020 due to Covid-19 and a three-month-long industrial dispute at the large Cerrejon operation.

Production rose to 59.6 million tonnes in 2021, up from 49.3 million tonnes the year before but still well short of the almost 80 million tonnes it achieved previously. 

“It is expected that production will increase again this year, potentially making an additional 10 million tonnes available for the export market, particularly as Glencore, now the full owner of Cerrejon, looks to take advantage of market conditions and rack up value from the acquisition,” the firm said.

US coal production is currently resurging after several years of decline, boosted by strong coal demand and robust prices.

US thermal coal producers were on track to end up exporting approximately 36 million tonnes last year, a hefty 30% increase from 2020. 

However, a lack of investment in new mining areas has led to several US mines closing, which will hamper the ability to ramp up additional coal for the EU market.

Sign up to our mailing list and get daily news headlines and weekly features directly to your inbox free.
Subscribe to receive print copies of Freight News Features to your door.

Exporter body heads to Parliament in push against cabotage

Imports and Exports
Sea Freight
02 Jun 2025
0 Comments

Airline profitability to rise in 2025 – IATA

Air Freight

But air cargo demand growth is expected to dampen due to global trade tensions, says IATA.

02 Jun 2025
0 Comments

More pain for steel industry after Trump’s latest tariffs

Imports and Exports

An increase in related overhead costs of per-unit production will drive inflation higher.

02 Jun 2025
0 Comments

Warehousing constraints call for innovation

Africa
Logistics
Sea Freight

This shift has been driven by regional supply disruptions, which have led to the rerouting of cargo traditionally processed through other ports.

02 Jun 2025
0 Comments

Panama-flagged bulker runs aground off Sweden

Sea Freight

The vessel is carrying fuel and ballast, raising concerns about environmental risk if conditions worsen.

02 Jun 2025
0 Comments

Transnet aims to move 250 million tonnes on to rail network

Logistics
Road/Rail Freight
30 May 2025
0 Comments

Federal Appeals Court temporarily reinstates Trump tariffs

Imports and Exports
International

Importers face uncertainty as legal fight continues.

30 May 2025
0 Comments

Global air cargo market builds momentum

Air Freight

US retailer frontloading of orders and lower fuel prices boost volumes.

30 May 2025
0 Comments

CMA CGM leads the way as Houthis ease off on Suez

Sea Freight

Despite this reassurance, the Yemen-based rebels reiterated their hostile stance towards Israel.

30 May 2025
0 Comments

Hawks swoop on four testing station officials

Crime
Road/Rail Freight

The officials were arrested after allegedly fraudulently issuing driver’s licences.

30 May 2025
0 Comments

Carrier announces surcharges for ex-Asia SA cargo

Logistics

The measure encompasses shipments from various countries in Far East Asia.

30 May 2025
0 Comments

Cross-border payments remain a hurdle – Masondo

Border Beat
Logistics
Trade/Investment

SA’s 2025 G20 presidency coincides with African nations deepening their AfCFTA commitments.

30 May 2025
0 Comments
  • More

FeatureClick to view

West Africa 13 June 2025

Border Beat

Zim's anti-smuggling measures delay legitimate freight operations
06 Jun 2025
Cross-border payments remain a hurdle – Masondo
30 May 2025
BMA steps in to help DG and FMCG cargo at Groblersbrug
21 May 2025
More

Poll

Has South Africa's ports turned the corner?

Featured Jobs

New

Sales Manager

Tiger Recruitment
East Rand
12 Jun
New

Export Controller

Lee Botti & Associates
Cape Town
11 Jun
More Jobs
  • © Now Media
  • Privacy Policy
  • Freight News RSS
  • About Us
  • Advertise
  • Send us news
  • Contact us