Coal output at Chervonoarmiyska Zakhidna Mine decreased by 5% to 2.8 mmt, while at Komsomolets Donbassa, output volume unexpectedly dropped by 8.5%. We view both results as NEGATIVE.
Interfax reported that Ukrainian coking coal output dropped by 1.3% to 14.2 mmt, while steam coal output rose by 6.8% to 25.3 mmt. The drop in total coking coal output was caused by a production disruption at the Zasiadko mine which slashed output by 62% y-o-y or about 1.1 mmt.
The lower figures suggest that the coal shortage will continue and we can expect coal prices to continue rising, even after the 100% boost within the last 12 months. In addition, the Russian Government is considering levying coal export tariffs which would stoke tensions, as Russian imports account for roughly 10%-12% of Ukraine’s coal consumption.
1H08 coal output, mmt
1H07 108 y-o-y SHCHZ 3.0 2.8 -5% SHKD 1.8 1.6 -8.5% Total coking coal 14.0 14.2 1.4% Total steam coal 23.7 25.3 6.8%
Source: Interfax
Oleh Yuzefovych Analyst (+380 44) 490-1617
