London, 2 January (Argus) — Russian coking coal exports were hit by icy conditions, congestion and maintenance last month, with state-owned railway operator RZD imposing restrictions on some rail routes and terminals in an attempt to ease bottlenecks. Deliveries through Russian far east ports have been hindered since the end of November, in part because falling temperatures led to some cases of frozen coal, which is difficult to unload. Coal suppliers to ports in Russia's far east say they have faced delays of several days. "Some of our railcars carrying coal that were headed from Yakutia to Vanino port in the Khabarovsk region were standing idle for 3-4 days, while railcars headed to Nakhodka port in the Primorsky region were idle for 2-3 days in December," one supplier said. But he added that he had not noticed any delays in deliveries to the Vostochnaya Stevedoring terminal at the port of Vostochny in Primorsky. Suppliers of coal from Kemerovo are encountering more problems than exporters from regions closer to ports, the same supplier said, while another noted there were many idle trains on the route from Kuzbass to the country's far east ports, in particular on the Zabaikalskaya railway. The Russian far east delays are not critical and RZD has not yet imposed official limits on coal supplies to the region's ports, although some suppliers are wary that limits might be introduced soon. Some Russian coal exporters are also contending with restricted shipments at overland border crossings with China. RZD banned coal supplies to the Kamyshovaya-Hunchun crossing on 1-23 December, and it halved supplies to Grodekovo-Suifenhe on 7-16 December. "The reason could be congestion on the Chinese side," a market participant said. Russia-China border crossings are frequently congested because their throughput capacity is limited, while Russian suppliers have been pushing to increase overland deliveries in light of Beijing's restrictions on China's seaborne coal imports. Chinese imports of Russian coking coal are subject to a 5-6pc tax, limiting but not ruling out Russian sales to the country. Deliveries to Russia's largest northwestern coal terminal — Rosterminalugol at the Baltic port of Ust-Luga — have been constrained since RZD introduced a 50pc reduction in supplies to the terminal on 2 December to tackle congestion. The restriction is in place for an indefinite period. Around 4,500 railcars were said to be standing idle at the terminal by mid-December, with no improvements anticipated in the near term. Difficulties at Rosterminalugol resulted in a rise in the number of idle trains on the Oktyabrskaya line, which serves northwestern ports. Some 105 trains were standing idle on this route on 13 December, including 100 that were loaded, up from 84 trains on 20 November, RZD said. Congestion at Rosterminalugol has probably been exacerbated by works to replace one of its railcar dumpers, which began in June last year. The terminal completed maintenance at the end of October and many suppliers upped their deliveries, expecting it to operate at a higher capacity. But Rosterminalugol is still carrying out start-up preparations and adjustments, according to market participants, who expect the new railcar dumper to be operational in early 2019, bringing with it a potential 30-50pc month on month rise in the terminal's January coal shipments. Some market participants expect icy conditions to bolster spot coal freight rates from Russia's Vysotsk and Ust-Luga ports to Rotterdam this month, anticipating gains of around $0.70-1.25/t to $9-9.25/t. These ports freeze in winter, meaning shipping will require ice-class vessels. And Rosterminalugol is expected to require more large vessels as its repaired railcar dumper starts up. Latvia's Riga port does not typically freeze but shipping costs on this route might rise owing to the introduction of International Navigation Limitations (INL) this month at most northwestern ports — measures that control the navigation of vessels during the winter season. RZD restricted deliveries of all cargoes at the overland border crossing with Finland at Buslovskaya station on 7-11 December. Supplies to eastern Europe have also been constrained, with RZD banning coal deliveries at the Mamonovo-Braniewo crossing between Russia's Kaliningrad exclave and Poland on 1 December for an indefinite period. "Deliveries to Poland are stuck as a result of congestion on the Polish side, where there have been problems unloading. But there are no difficulties with supplies through another overland border crossing with the Kaliningrad region — at Dzerzhinskaya-Novaya," a market participant said. In Ukraine, RZD is understood to have restricted supplies to local steelmaker ArcelorMittal Kryvyi Rih, after it banned coal shipments in the second half of November and then again on 12-23 December, according to one Russian supplier. "We ship about 15,000-20,000 t/month to Arcelor Mittal Kryvyi Rih, but were able to ship just 8,000t last month. And we are unlikely to ship any volumes this month, as it is hard to find railcars for transportation to Ukraine," the supplier said. Russia's southern ports were affected by storms in November, which then extended into December, leading RZD to impose restrictions on coal supplies to Black Sea and Azov Sea ports. Weather conditions are understood to have improved lately, but it will take time for operations to return to normal. RZD banned coal deliveries to the Azov Sea port of Yeysk on 5-11 December and halved supplies to the Black Sea port of Novorossiysk on 30 November-2 December. And the rail operator in November restricted supplies to Taganrog and Kavkaz because of storms. A total of 140 trains, almost all loaded, were idle on Russia's North Caucasus Railway that serves southern ports as of 13 December, up from 122 on 20 November. The North Caucasus railway is the country's most congested export route. "Many southern ports do not have large storage capacities, so any problems result in congestion on rail lines," a market participant said.
Frigid temperatures have combined with congestion and maintenance work to delay exports of coking coal from several Russian ports, according to suppliers. In December, state-owned railway operator RZD stopped rail shipments to China via the Kamyshovaya-Hunchun crossing, halved deliveries to the Rosterminalugol terminal, which is making adjustments after summer maintenance work, banned shipments to Black Sea port of Yeysk and reduced supplies to the the Azov Sea port of Novorossiysk by 50%.