Activity in the Baltic regions has surged in the last 10 days as port authorities in Ust-Luga and St. Petersburg in Russia have announced that they will only allow the transit of ice-class vessels in their harbors from March 6.
As the cold weather conditions in the Baltic ports are expected to worsen over the coming weeks, industry participants reported that the charterers were trying to “push as many coal cargoes out” before the regulation is implemented.
“It has been good for the Baltic which has been dormant for a while,” said a shipbroker, adding that “on average an ice-class shipment earns $20,000/day for a Baltic round voyage breaching for Ust-Luga while non-ice class [vessels] following ice-breakers are nonetheless getting $18,000-19,000/day for a time-charter trip.”
After the March 6 cutoff date, coal shipments that don’t fit the new requirements will have the option of loading Russian coal from the port of Ventspils, Latvia, where coal will be moved by rail from Russia.
Coal sources reported that this might be the last thermal coal stems on the spot market to be moved from the Baltic regions to the UK Continent, as stocks won’t require as much coal as the spring season approaches.
“We’re being offered prompt cargoes from Ust-Luga at the moment but I doubt we will see much more after this small window of activity,” a Northwest Europe-based coal trader said.
“There is a lot of offers from Russian sellers due to the situation in the Baltic. I’d expect more shipments from Riga and other Latvian terminals over Ust-Luga in the near term,” a Northwest Europe-based utility-trader said.
The Ventspils to Rotterdam, Netherlands, coal run, basis 70,000 mt was assessed at $7.50/mt Wednesday, up 75 cents from the beginning of February.
The push in activity is likely to continue till the first week of March, when the restrictions are to be implemented.
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