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Economy 2019-09-20T04:04:19+03:00
Ukrainian news
Rotterdam + provides the lowest price of coal: results of the meeting of the President and NABU have been anno

Rotterdam + provides the lowest price of coal: results of the meeting of the President and NABU have been announced

According to the results of the meeting on energy issues held at the President’s Office, the Rotterdam + formula provides the lowest purchase price for coal for Ukraine - UAH 1741 per tonne.

Yuri Butusov, the editor-in-chief of Censor.NET, posted the following slide on his Facebook page.

Alternatives for defining import parity: July 2019

Comparison of prices for coal from alternative sources

UAH/tonne (coal concentrate: 5,200 kcal)

2,500 – price for coal produced by state-run mines

3,966 – production cost of state-run mines

1,741 – R+

1,913 – Columbia

1,913 – USA

1,811 – South Africa

1,275 – Rotterdam

1,714 – Ukraine

Price for coal produced by state-run mines: the current selling price of coal produced by state-run mines.

Production cost of state-run mines: non-competitive position with no investment in development.

API2+Logistics: Price indicator of imported coal supplied by sea

South Africa, USA, Columbia: countries that actually import coal by sea – the prices are on average equal to API2+ index (the price net of logistics covers imports from Russia only)

Ukraine, day-ahead market: effective coal price, based on electricity prices in the new market (day-ahead market).

Source: Columbia, USA, South Africa – based on offers provided by supplier companies (Rotterdam API2) – Argus/McCloskey Coal Price Index Report

For comparison, the price of Ukrainian state mines is UAH 2500 per tonne with cost of UAH 3966/ tonne. Import of thermal coal from South Africa will cost 1811 UAH / tonne, from the USA and Colombia even more expensive at UAH 1913 /tonne.

According to Butusov, Ukraine loads over 49 thousand tonnes of coal per day into warehouses, while the actual consumption is 73 thousand tonnes per day. If reserves are not replenished at a quicker rate, then there will only be enough until mid-October.

"Therefore, we need to make a decision - how to buy coal for thermal generation? It turned out that it is now profitable to buy either in Colombia, at UAH 1900 per tonne, or ... under the Rotterdam + scheme. Regarding which NABU and SAPO are conducting a high-profile criminal case and estimate the damage from the scheme at 19 bln," he added.

DTEK CEO, Maxim Timchenko, noted: “Rotterdam + now provides the lowest prices at UAH 1700 per tonne. Well, it is likely that Donbas coal, which is sold through Russia several hundred kilometers to bypass the front line, will, of course, be cheaper than any other coal supply scheme, "the journalist continued.

"A paradoxical situation ... But a decision has not been made. Apparently, the reduction of tariffs for industry and the replacement of Rotterdam + with something will already be made by a new Cabinet of Ministers," he stressed.

Russian journalist Arkady Babchenko responded to Butusov’s post on Facebook: "We can allow ... But how can it be ... After all, Rotterdam + ... Huckster ... Tariffs ... Cashing in ... Great insider."

Let’s remember, a meeting was held with the participation of the President of Ukraine on Monday regarding a new model of the electricity market and preparations for the autumn-winter period.

The meeting was also attended by representatives of law enforcement agencies - Specialized Anti-Corruption Bureau and Specialized Anti-Corruption Prosecutor's Office.

As OBOZREVATEL reported, on June 5, the Cabinet of Ministers decided that the launch of the electricity market, scheduled for July 1st, will not be postponed.

To keep tariffs, suppliers will be obliged by special resolution of the relevant Regulator to keep the price within the defined framework.

It is expected that the launch of the market will destroy the existing monopoly system and allow Ukrainians to independently choose from whom and at what price to buy electricity.

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