The OTEKO terminal began to reduce prices for coal transshipment after a boycott of coal companies due to high tariffs

The OTEKO terminal began to reduce transshipment prices after a boycott of coal companies dissatisfied with high tariffs. OTEKO notes that the terminal chose more convenient “pegging indices” to determine transshipment rates and canceled a number of adjustment factors. However, coal companies, according to Kommersant, still consider the rate too high.

The OTEKO coal terminal is reducing tariffs for coal transshipment after a boycott of coal companies that refused to export through Taman, sources familiar with the situation tell Kommersant.

OTEKO is the operator of two marine terminals in the port of Taman: bulk (with a coal capacity of 70 million tons) and liquid. The owner of the group is Michelle Litvak. In 2023, coal transshipment through the terminal amounted to 25.5 million tons.

As Kommersant wrote on February 6, coal companies refused to transship through the terminal due to high tariffs. According to Kommersant’s sources, the situation with the port was discussed at a meeting on March 28 with First Deputy Prime Minister Andrei Belousov. At this meeting, according to sources, Michel Litvak announced that he was reducing transshipment tariffs. Sources say the rate for thermal coal is now $27 per tonne versus the previous $38–42. However, according to sources among exporters, even the new rate level does not allow for profitable export of coal through Taman. The coal companies did not provide comments.

The OTEKO press service stated that they “have taken a number of steps towards their fellow coal miners, taking into account the difficult situation in export markets.” The terminal chose more convenient “pegging indices” to determine transshipment rates, increased the terms of free accumulation of cargo, and canceled a number of correction factors. “Shipments are beginning to recover, and as the export market normalizes, this process will become more active,” OTEKO reported. They called the rate level of $27 “irrelevant” and added that the rate depends on the dynamics of index prices for coal and its current level is “significantly lower.”

According to OTEKO, the basic conflict that triggered the chain reaction was the constant reduction in the volume of cargo transported by rail. A decrease in loading and failure to fulfill plans is observed not only in the South, but also at other testing sites. “Despite the difficult situation, we are confident that the situation with loading, and in the future with network capacity, will improve. This problem is obvious to everyone, including the monopoly itself (JSC Russian Railways— “Kommersant”) and the supervising departments, many decisions have already been made to gradually resolve it,” OTEKO reported.

JSC Russian Railways told Kommersant that the information about the constant reduction in the volume of freight traffic in the southern direction does not correspond to reality. Over the past few years, JSC Russian Railways has carried out large-scale work to expand the main approaches to the ports of the Azov-Black Sea basin, the monopoly said: since 2020, carrying capacity has increased by 29.5 million tons, to 125.1 million tons. Thus, significant reserves of infrastructure capacity have been created. Based on forecast transportation parameters, by 2030 it is planned to increase carrying capacity by another 27 million tons, to 152 million tons per year. “The decrease in traffic to individual terminals is due to reasons beyond the control of Russian Railways, including failure to ensure unloading due to weather and other reasons, lack of fleet delivery, lack of contractual relations with the shipper and others,” they said.

The estimated efficiency of export (netback) of Russian thermal coal from Kuzbass through the port of Taman was in the negative zone throughout March against the backdrop of high transshipment costs, reaching $40 per ton, comments Alexander Kotov, head of consulting at Neft Research. At a transhipment rate of $27 per ton, the netback becomes positive – at the level of 850 rubles. per ton. However, one must understand, the analyst says, that the overall economics of thermal coal supplies from Kuzbass are still going into the red, taking into account the increase in production costs (by about 5–7% year on year), the increase in the railway tariff by 11%, the cost of operating gondola cars by about 6 -8%. In addition, the credit burden on coal companies has increased.

Evgeniy Zainullin, Natalya Skorlygina