Business news from Ukraine

UKRAINE INCREASES COAL IMPORTS BY 15%

Ukraine in January-October 2021 increased imports of hard coal and anthracite (heading code 2701) by 14.8% (by 2.064 million tonnes) compared to the same period in 2020, to 16.03 million tonnes. According to the State Customs Service, coal was imported for $1.741 billion, which is 21.6% more than in January-October 2020 ($1.432 billion).Coal was received from the Russian Federation for $1.141 billion (share in imports 65.54%), the United States for $322.306 million (18.51%), Kazakhstan for $195.42 million (11.22%), and other countries for $82.329 million (4.73%). Coal exports by Ukraine in January-October 2021 amounted to 4,982 tonnes for $0.8 million, including to Slovakia for $0.768 million, Hungary for $0.018 million, Bulgaria for $0.007 million, other countries for $0.007 million. For the same period of 2020, exports amounted to 2,255 tonnes for $0.186 million, including to Poland for $0.156 million, Moldova for $0.027 million, and Hungary for $0.004 million.

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UKRCEMENT: RISE IN COAL PRICES FORCES CEMENT PRODUCERS TO WORK WITH MINIMUM MARGIN

The majority of cement producers in Ukraine are forced to work with minimum margins due to the rise in coal prices by more than two times, the Ukrcement association has reported.
“The price swing for coal this year did not pass us by. The supply contracts were signed last year at an average price of $60 per tonne, and in August, suppliers agreed to ship coal at a price of at least $175 per tonne. This creates significant pressure on the pricing policy. It is impossible to make cheap goods out of expensive components,” Chairman of the Ukrcement association Pavlo Kachur said in an interview with Interfax-Ukraine.
According to him, the cost of energy is 52-55% of the cost of clinker required for cement production. At the same time, all Ukrainian cement plants have previously been modernized and switched to coal due to the high price of gas.
The situation with the rise in prices for cement in Ukraine due to the rise in prices for coal is not unique and is observed in the markets of other countries, Kachur said.
“For example, Turkish cement producers sharply raised cement prices in July due to the rise in the cost of coal. We proceeded from the fact that we must take into account the needs of consumers. Therefore, some companies significantly minimized margins in order to go through this difficult period with minimal costs for cement plants and the construction market as a whole,” he said.

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CONTAINER TERMINAL COULD BE BUILT IN MARIUPOL

A modern container terminal could be built in the port of Mariupol (Donetsk region) on the territory of the former coal-loading complex, Ihor Barsky, the head of Mariupol seaport.
“In the long term, we have a dream: to turn the territory of the former coal loading complex of the seaport into a modern container terminal,” he said during the NewPort international exhibition in Kyiv.
Barsky recalled that since 2015, the container flow in the Sea of Azov has been completely stopped. Container lines stopped making calls to Azov after the imposition of European and American sanctions on Crimea.
“Now we are working to return container traffic to Azov. We are supported in this issue by the city, the region, the Ministry of Infrastructure. This is a difficult task, but solvable,” he said.
According to him, at present the port has pre-design studies of this terminal, in the future a feasibility study will be ordered.
“Now we are liquidating the loading complex, selling the equipment that is there, and preparing this serious investment site. How much it will cost – I can’t say yet. We can talk about this when the feasibility study is completed,” Barsky summed up.

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UKRAINE INCREASES COAL PRODUCTION

Coal mining enterprises of Ukraine in January-August 2021 increased production of run-of-mine coal by 6.2% (by 1.154 million tonnes) compared to the same period in 2020, to 19.681 million tonnes, according to data from the Ministry of Energy.
According to the calculations of Interfax-Ukraine, in particular, coal mining enterprises managed by the ministry increased production by 2.2 times over the eight months of this year (by 2.223 million tonnes), to 4.021 million tonnes, which is largely due to the return of Dobropilliavuhillia assets from DTEK’s lease.
The mines of Donetsk region over the eight months of this year ensured production of 8.129 million tonnes of coal (more by 21.4% compared to January-August 2020), Luhansk – 176,700 tonnes (more by 33.6%), Dnipropetrovsk – 10.506 million tonnes (less by 2.9%), Lviv – 858,100 tonnes (more by 1.1%), and Volyn – 11,000 tonnes (less by 57.6%).
In August 2021, production of run-of-mine coal in the country fell by 27.6% (by 770,200 tonnes) compared to the same month last year, to 2.016 million tonnes.

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UKRAINE NEEDS TO IMPORT 3.5 MLN TONNES OF COAL

Ukraine needs to import approximately 3.5 million tonnes of thermal coal during the coming heating season, Energy Minister Herman Haluschenko has said.
“Additionally, it is needed to import about 3.5 million tonnes during the heating season in accordance with the coal accumulation schedule,” the minister said in an exclusive interview with Interfax-Ukraine.
At the same time, he noted that generating companies – both DTEK and Centrenergo – have begun to conclude contracts for coal imports.
According him, the price of electricity in the market already makes it possible “to calmly buy coal, produce [electricity], sell and earn money.”
“We expect that we will stabilize the situation with coal and will calmly pass the autumn-winter period,” the minister said.
At the same time, he noted that in the heating season of this year, the Ministry of Energy also expects “certain achievements” – the NPP operation with at least 14 units out of 15 operating, as well as, if necessary, especially in December-January, connection of the 15th atomic block to the system. According to his forecasts, gas reserves in underground storage facilities will reach 19.5 billion cubic meters at the beginning of the autumn-winter period.
According to presidential decree 452/2021, promulgated on Monday, which approved the decision of the National Security and Defense Council (NSDC) dated July 30, 2021 on measures to neutralize threats in the energy sector, the Cabinet of Ministers must ensure the accumulation of natural gas, reserve fuels and coal by October 31 of this year for the smooth operation of the fuel and energy complex during the heating period 2021/2022, as well as the priority of providing open wagons for shipment of coal products by rail in accordance with the requests of coal enterprises – mines and processing plants. Also, the government needs to ensure the completion of the implementation of measures regarding the readiness of the fuel and energy complex to work in a special period and make appropriate decisions.

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DTEK PLANS TO IMPORT COAL FROM KAZAKHSTAN, POLAND, US

DTEK Energy, amid low coal stocks at its TPPs’ warehouses, has begun importing thermal coal from Kazakhstan and is negotiating coal supplies from Poland and the United States, the company’s press service has said.
According to the press service, DTEK Energy is actively looking for opportunities to provide TPPs with additional imported coal.
“Despite the increased demand for coal on global markets, we are actually starting to import it. The first batch from Kazakhstan is already on its way. Next week we expect the start of coal supplies from Poland. We are also negotiating the supply of shiploads from the United States,” CEO of DTEK Energy Ildar Saleev said.
According to the Ministry of Energy of Ukraine, coal stocks in the warehouses of thermal power plants of five power generating companies (DTEK Dniproenergo, DTEK Zakhidenergo, DTEK Skhidenergo, Centrenergo and Donbasenergo) as of Wednesday morning dropped to 754,000 tonnes, which is almost 500,000 tonnes less than the accumulation schedule approved by the ministry on August 11 (1.237 million tonnes).

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