The OTECO coal terminal at Taman port, Russia, has trimmed coal transshipment rates from $32-38/t to $18-19/t for the second quarter of this year. Despite this notable revision, coal exporters could still struggle to achieve profitability.
The rate adjustment followed a slump in railway supplies to the terminal in the first quarter, down 80% year on year to 1.4 million tonnes. Faced with high transshipment costs, exporters suspended rail shipments from the beginning of February.
As global coal prices have fallen to levels in 2015-16, terminal fees and rail transport charges need to align with the cost levels of those years. However, the revised transshipment rates at OTECO still exceeded the 2015-16 levels by $2/t and rail rates are nearly $11/t higher.
Moreover, exporters have to pay export duties starting from March 1. With these factors combined, exporters are subject to an extra cost of $12-15/t.
In 2023, OTECO terminal handled 25.1 million tonnes of coal, down 15% from a year earlier. This year, the figure could continue to decline, potentially impacting the country's overall coal exports.
The suspension of shipments to the terminal by coal companies in the first quarter has left 4.9 million tonnes of coal backlogged, highlighting a lack of effective alternatives.
(Writing by Alex Guo Editing by Harry Huo)
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