With a full ban on Russian coal imports since mid-August, Europe is increasingly focused on sourcing its coal from other destinations notably Colombia, USA, and South Africa. South Africa’s total January-July exports expanded to 40.9 MMT (+3.9 MMT/+11 y-o-y), with exports to the Continent/Mediterranean region rising from 0.7 MMT in the first seven months of 2021 to 9.7 MMT y-o-y in 2022, comprising 24% of total shipments, up from just 2% in 2021.

This backhaul trade has been dominated by Panamax and Capesize shipments. For instance, a significant amount of 2.8 MMT of coal shipped to the Netherlands from South Africa has been carried in Capesize and this changing trade pattern together with Capesizes bringing coal in from elsewhere has led to markedly increased congestion in Rotterdam with around 15 Capesize vessels presently at anchor waiting for a berth in Europe’s largest port. In addition, 50 Panamax vessels carried over 4.3 MMT of coal to Europe in the first seven months of the year compared to only 1 Panamax shipment over the same period last year.

The shift in trade in Panamax tonnage to the Atlantic has led to more balanced availability in this sector between the Atlantic and Pacific basins and has clearly acted a brake on outbound rates in the past few months.