Perret Associates estimate that the potential loss in steam coal exports only (excluding metallurgical coal) from Murmansk to the EU and Med. destinations could equate to a maximum of 3-4mt during June-December. This assumes the worse case scenario when the bridge supplying coal to Murmansk will not be repaired before January 2021.
The consultancy estimates that the potential loss could be relatively easily replaced by additional supply from other Russian exporters, Colombian material and healthy stocks in NW Europe.
The recent increase in spot DES ARA spot prices and decrease in the average cost of production for most coal exporting companies since the beginning of the year, means that some Russian and Colombian mines that were just breaking even or even loss making in Jan.-February are now gradually back in the money,
Meanwhile, as part of their latest Interim Supply & Demand, Perret Associates forecast EU + Med. steam coal imports to fall by 30mt in 2020 at a historical low of 42.8mt. For reference , EU imports were still at 131.7mt in 2015.
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