Russia's largest coal producer Suek declared force majeure on the operation at the Far East port Vanino on October 12, as a result of a fire a day earlier.
The fire occurred at Vanino Bulk Terminal (at Muchke Bay) operated by Daltransugol JSC. The conveyor belts K5A and K5B were severally affected by the fire and cannot be operated at the moment making it impossible to perform any coal loading operations at the port, according to a notice issued by Yury Filippov, CEO of Suek AG, an exclusive exporting company of SUEK.
While coal shipments to the port are not affected, vessel loading operations were suspended from October 11. "Once we have any information on a possible length of suspension of the cargo operations at the port, we will let you know accordingly," the notice said.
It is heard that Suek is the largest user of the port, shipping 12.7 million tonnes of coal during the first nine months through the port, followed by another coal producer Elga Ugol by 1.2 million tonnes, KTK by 240,000 tonnes, and KRu by 145,000 tonnes.
Vanino shipped around 28.8 million tonnes of thermal coal last year, the second-largest by volume among all Far East ports, only to Vostochny, which exported 36.8 million tonnes.
The fire is likely to worsen the supply shortage in Asia-Pacific, where China, South Korea, and Japan in the northern hemisphere are scrambling to restock in the run-up to the winter heating period.
The strong demand and limited supply sent Russian coal prices surging since late September. As of October 8, Russian 6,000 Kcal/kg NAR thermal coal was offered around $220-230/t FOB, up 7.3% from a week ago and 4.2 times higher than the year-ago level.
(Writing by Alex Guo Editing by Tammy Yang)
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