Russian coal exporters who had used Yuzhny as their main route to the Mediterranean market and Turkey said they have switched to smaller, lower-tariff, Russian terminals and some are even shipping 65-75,000 tonne panamaxes from Baltic ports to southern Europe which is also cheaper.
Ukrainian state-owned Yuzhny had for over a decade been the main export terminal for Russian coal in panamaxes to the Mediterranean market and Turkey, shipping at a rate of 2.3 million to 6 million tonnes a year since 2006, exporters said.
But a steep hike in port tariffs caused Yuzhny's two biggest coal clients - Russia's SDS and Alinos (the marketing arm of Kuzbassrazrezugol)- to pull out of the port and use alternative terminals in the Black Sea and even the Baltic, to ship to the Mediterranean.
Russian exporters' cash costs - the cost of mining and moving coal to a port - are the highest in the world at over $80 a tonne FOB so every cent added to costs erodes already slim profit margins, they said.
"The Ukrainians killed Yuzhny (for coal), it will stay that way until they drop the tariffs," one major Russian exporter said.
"It's far too expensive and why should we load panamaxes at high cost there if we can't sell the bigger cargoes against U.S. coal which is offered at a discount?" another major exporter said.
In response to the coal exporters' withdrawal, Yuzhny switched to handling iron ore in October, port sources said, because it was more profitable than coal.
State-owned Yuzhny port is a sprawling complex close by the city of Odessa, and Odessa and Illiychevsk ports. It is Ukraine's newest and deepest port which can handle up to 20 million tonnes a year of a variety of bulk cargoes from over 20 piers or terminals but has not been used at full capacity for years, exporters said.
"Not a single tonne of coal has been shipped from Yuzhny for some months - it is empty, but those who can are using smaller ports like Tuapse or Mariupol to go back and forth in tiny vessels to Turkey," he added.
Yuzhny shipped no coal since last July, but Russia's biggest exporter, SUEK, started using the port last month, exporters and port sources said.
However, the privately-owned TIS terminal, also in Yuzhny, is continuing to ship Russian coal although the state-owned port is not, a company official said at the Coaltrans Russia & CIS conference on Wednesday.
"Zarechnaya (a Russian coal producer) is using TIS, a few other people also but SUEK only used the state Yuzhny port when it could not load due to freezing in Azov bay, but there are some shipments from TIS," the second exporter said. (Reuters)
