Ukraine imposes 65% duty on Russian coal and power imports

Ukraine’s Cabinet of Ministers approved on Mar. 18 a
draft resolution to impose duties for imported Russian steam coal and
electricity starting April 2020. The duty won’t be applied to coking coal and
anthracite steam coal, for which there is a deficit in Ukraine.

Alexander Paraschiy: The benchmark prices for steam coal in Europe are below USD 50/t now,
while the domestic price of coal is close to USD 80/t, which makes Ukraine a
potentially lucrative market for Russian coal suppliers. But even Ukraine’s
high price does not cover the production costs of state-controlled coal mines.
The new duty enables supporting domestic coal prices at their current high
levels and minimizing the state’s costs related to supporting inefficient coal
mines. But the key beneficiary of this decision will be DTEK Energy (DTEKUA),
which produces almost 90% of steam coal in Ukraine.