It was decided not to blame OTEKO

Lower coal prices and infrastructure constraints are leading to rising tensions between coal companies and export terminals. Thus, in January, companies and traders halved transshipment through the OTEKO terminal in Taman, believing the cost of services to be too high. OTEKO considers its tariff policy to be completely justified, and Kommersant’s interlocutors in the industry talk about coordinated pressure on independent terminals from coal miners. According to experts, a possible solution could be the conclusion of ship-or-pay agreements with volume guarantees from shippers.

Coal companies and traders have reduced transshipment through the OTEKO terminal in Taman, seeking a reduction in tariffs, industry sources tell Kommersant. According to Kpler, in January exports through Taman amounted to 548 thousand tons, which is 53% less than December and 76% less than January 2023. For comparison: the drop in exports through the port of Ust-Luga on the Baltic was only 9%. According to one of the traders, the reduction in transshipment was due to the “unreasonable pricing policy” of the OTEKO terminal, which does not make concessions on transshipment costs in the face of falling coal prices. OTEKO told Kommersant that they consider their tariff policy to be fair and justified, and “do not respond to outright blackmail, including informational ones.” The coal companies did not provide comments.

OTEKO is the operator of two marine terminals in the port of Taman – bulk and liquid. The company calls itself the largest private investor in the port and industrial infrastructure of southern Russia. The owner of the group is Michelle Litvak.

According to one of Kommersant’s interlocutors in the industry, “there is a conspiracy” of key coal traders against all unprotected ports, that is, those that are not part of the same group of companies with coal producers. According to him, traders are taking advantage of the seasonal decline in shipments associated with the Chinese New Year. “So traders have a month to sort out the ports and try to push them to the rates of 2019-2020, when the cost of transshipment was $8-14 with the price of a ton of coal being $50,” he says. According to Argus, cited by Kommersant’s interlocutor, over the past four months, OTEKO’s transshipment price has remained unchanged – $24.5 per ton.

Another Kommersant interlocutor says that the reduction in transshipment in Taman is due to the seasonal decline in shipments, the continuation of negotiations on conditions with a number of traders, as well as planned work to modernize the terminal.

Export prices for thermal coal are indeed falling. According to the Price Index Center, 6000 kcal coal fell in price by 7.4% over the week and costs $101 per ton on a FOB Far East basis, 5500 kcal coal fell in price by 7.1%, to $92 per ton, 5000 kcal coal – on 8.9%, up to $77. On the FOB Baltika basis, 6000 kcal coal fell in price by 4.7%, to $71 per ton, on the FOB Taman basis – by 4.6%, to $83 per ton. In the southern and western directions, netbacks reached minimum values ​​of $7–8, which is lower than the cost of production.

Tensions between exporters and terminals began to rise in the Far East as well. Russian Coal reported on February 5 that the VaninoTransUgol terminal (VTU, part of the Kolmar group), despite the existing long-term contract, decided to increase the cost of transshipment up to three times. Since Russian Coal did not recognize the increase in rates, VTU, according to Russian Coal, unilaterally refused to fulfill the contract without compensation for costs. Kommersant sent a request to VTU.

In the context of declining coal prices, the issue of export efficiency becomes decisive, especially for companies that do not have their own terminals, states the head of Infoline-Analytics, Mikhail Burmistrov. “If the costs, in the opinion of companies, are high, then they either redirect shipments or stop them. Now new export options are emerging: in the first quarter of 2024, it is planned to begin export through Lavna in Murmansk,” he says. According to Mr. Burmistrov, a possible way out of the current situation in the south could be the conclusion of ship-or-pay agreements, when the coal company guarantees the volume of transshipment, and the port provides a special tariff.

Evgeny Zainullin, Dmitry Kozlov