Morocco vies with EU for supplies as it shuns Russia coal - Montel
Morocco is avoiding Russian coal, potentially increasing competition with European buyers for alternative origin material, market participants said on Wednesday.
Following an EU-wide ban on Russian coal in August last year, the latter ramped up exports to alternative destinations, with the north African nation one of the few remaining Atlantic basin buyers.
Russia shipped on average 0.65m tonnes/month to Morocco in August 2022-January 2023, around double the average volume shipped over the prior six-month period, according to DBX data.
But DBX and Kpler saw imports this month totalling just 0.45m tonnes and 0.38m tonnes, respectively, while DBX pegged US supply at a five-month high of 0.14m tonnes.
Tightening restrictions
“We see more tenders in which Russian coal is restricted,” said an analyst with a Swiss coal-trading firm.
The Jorf Lasfar Energy Company (operates a 2 GW coal-fired plant in the west central region of Doukkala-Abda) issued two tenders to procure March-delivery coal cargoes earlier this week, on top of two requested last week, also for March.
The analyst said Russian coal was not especially banned in the tender “but in practice, it’s for non-Russian”.
As such, Morocco was turning to alternative origins and potentially vying with northwest European buyers for supply.
“With 10-11m tonnes of annual demand, Morocco will compete with Europe for South African and US coal,” the analyst said.
Significant impact?
But the impact on European supply was unlikely to be significant, said Vinesh Chetty, head of energy commodities with Cape Town-based consultancy Afriforesight.
“Morocco is a small coal user,” he said, noting the country accounted for around 7% of Africa’s coal consumption, compared with 84% in South Africa.
“[But] as with their oil and gas, Russia will need to keep looking for new buyers to take their products,” Chetty said.
With stocks at northwest European ports more than double the volume from a year ago – at nearly 6m tonnes – any immediate impact on European prices from a Moroccan switch to non-Russian coal would be negligible in the near term, market participants said.
The front-month API 2 contract changed hands last at USD 135/t, down from USD 190/t at the beginning of January, on Ice Futures.
