Russia is expected to lift its coal export embargo to
Ukraine in July after shipments fell almost to zero in June 2019.
Russian suppliers of coal and met coke expect to move
more volume across the Ukrainian border in July, Ukrainian buyers said this
week. Exports to the country dwindled this month after the Russian Ministry of
Economic Development approved only a small fraction of the usual amount.
During January-May 2019, Ukraine imported 5.1 MnT of
metallurgical coal, with 80% of this sourced from Russia. This month, Russia’s
exports of met coke and coal – both thermal and metallurgical – to Ukraine have
almost stalled as a result of a new pre-approval system put in place. Since
June 1, all coal and coke exports to Ukraine are subject to permits from the
Russian Ministry of Economic Development, according to a governmental decree in
mid-April.
In Ukraine, both big mills and vertically integrated
companies, currently doing OK, as they are sourcing the coal from the US and
Kazakhstan, where these companies have captive mines. But, the standalone
non-integrated steelmakers are still struggling. They usually operate on stocks
and are waiting for shipments from Russia to resume shortly.
Few market participants shared that, the move is meant
to restrict thermal coal supplies and to serve as leverage over Ukraine’s new
president. However, the regulators made no allowance for metallurgical coal,
perhaps assuming it could be used as a substitute for thermal coal,” said a
market participant, suggesting coal exports may get back to normal following the
meeting of the two presidents, something expected during the 2019 G20 summit in
Osaka at the end of June.
Source: Steel mint