Bulk carrier loadings have been halted at the Vanino Bulk Terminal in Russia following a fire, adding to shipping congestion. Russian coal producer and exporter Suek declared an indefinite force majeure on its cargoes on 11 October, according to a letter from the company seen by TradeWinds. Suek chief executive Yuri Filippov said two conveyor belts were severely affected by the blaze and cannot be operated, making it impossible to load any coal at the terminal. He added the company, which is also a vessel charterer, and the port authority are still assessing the damage caused by the fire and working on solutions to bring bulkers in again.

VesselsValue senior trade expert Plamen Natzkoff told TradeWinds: “This is a highly significant event right now, as coal and gas shortages are forcing electricity rationing throughout much of China.” He added that Vanino almost exclusively exports coal, suggesting that the vessels currently waiting there will be stuck until the loaders are repaired. “This also means that another meaningful source of coal is currently offline, just as the world is scrambling to get hold of energy commodities — gas and coal in particular — ahead of winter,” Natzkoff added.

The expert tallies 15 bulkers waiting outside the port, with a total capacity of 1.45m dwt. These are mainly capesizes and panamaxes. Some have been waiting for more than a week and one for nearly a month already. Another nine bulkers are expected to reach Vanino before 17 October. One vessel operator told S&P Global Platts that there is another terminal at Vanino that could load thermal coal from other mining companies. “There are other ports nearby to which some volumes could be diverted,” a shipbroking source said. “In the short term, it could also mean there has to be more replacement volume from Indonesia,” the source added.

Other market participants said the fire could worsen the power crisis in China due to its reliance on Russian imports. China has begun rationing power to industries because of coal shortages and to meet emission targets. Vanino has exported 16.3m tonnes of coal so far this year, comprising 4.5m tonnes to China and Taiwan each, 3m tonnes to Japan and just over 2m tonnes to South Korea.

The terminal was built in 2008. Total exports hit 23.2m tonnes in 2020, Suek’s website shows. The company produced 67.7m tonnes of anthracite and 33.5m of lignite last year. The price of Russian coal is tipped to shoot up, given that demand is firm and global coal supply continues to tighten, S&P Global Platts reported.

On 7 October, Richards Bay Coal Terminal in South Africa caught fire, though the impact has remained unclear. And the Chinese province of Shanxi has faced heavy rains and flooding which resulted in 60 mines being shut. Suek was established in 2004 as an exclusive exporting company of Russia’s Siberian Coal Energy Company, the country’s biggest coal producer.