Australia’s drive to send more coal to Europe during the Russia-Ukraine conflict has propelled the backhaul rate for capesize bulkers to highs not seen in months. The average spot rate for the C16 route covering voyages from Asia to Europe on Thursday shot up 141% to $12,450 per day, according to Baltic Exchange data. This figure hasn’t been this high since mid-December.

Overall, average capesize earnings jumped 14.5% on Thursday to reach nearly $21,700 per day, the Baltic Exchange said. The backhaul route only makes up 12.5% of the weight of the route basket. “It has to do with the backhaul, which is basically coal from Australia to Europe,” John Kartsonas, founder of dry-bulk ETF-trading platform Breakwave Advisors, told TradeWinds. “The distortion in coal trade is real, and capes are starting to get impacted by this.”

Among the day’s fixtures, the Baltic Exchange said BHP took a capesize vessel to move coal from Dalrymple Bay, Australia, to Rotterdam at a price of $28 per tonne. The Australian government is pushing the Queensland territory to boost coal volumes to Europe since neither Russia nor Ukraine is sending the commodity there during the war. Kartsonas added that the backhaul rate is the closest it has been to the benchmark China-Brazil route, which jumped 7.5% to $17,943 per day, in at least five years.

“Such a trend basically keeps more ships in the Pacific, causing a relative shortage of ships in the North Atlantic,” he said. “If it continues, as you know, we might see some fireworks down the road, but too early to call that.”

Europe will certainly need to source coal from more distant exporters such as Australia, South America, and South Africa as sanctions on Russian coal continue, said Stamatis Tsantanis, chief executive of capesize owner Seanergy Maritime Holdings. This may be welcome news for Brazil, which needs to double export volumes to meet its output target of 1.1m tonnes per day, he said. “Russia exports 50m tonnes of coal to Europe annually,” Tsantanis said.