DTEK plans to import 0.1 mmt of coal from Poland in October

Ukraine’s leading coal and power holding DTEK Energy (DTEKUA) received the first delivery of steam coal from Poland on Oct. 3, its press service reported. By the end of the month, the holding plans to receive 100 kt of hard steam coal from Poland. On top of that, DTEK is going to recieve 79 kt of anthracite coal from the South African Republic in November. The holding decided to import some coal to provide reserves at its power stations.

DTEK’s thermal power plants had to increase unexpectedly their power output in 3Q16 by 1.6 TWh yoy, which required the use of an additional 1 mmt of coal, according to commercial director Vitaliy Butenko. This forced the company to increase coal purchases. In September, DTEK’s power plants were receiving 56 kt of coal per day, on average.

According to an Oct. 2 report of power sector dispatcher Ukrenergo, 12 Ukrainian thermal power plants (of which 8 belong to DTEK) accumulated 1.26 mmt of coal as of Oct. 2, which is 38% less than a year ago. The government’s plan was that Ukrainian thermal power plants will accumulate 2.80 mmt of coal by end-October.

Alexander Paraschiy: As we can conclude from DTEK’s press release, coal imports from Poland will cover no more than 5% of DTEK’s total needs for October. Such imports also won’t be much helpful for all Ukrainian power plants in their plan to more than double coal stockpiles in October. However, such imports are still important for DTEK as they will enable the power sector regulator to argue that Ukraine is an importer of all types of steam coal, which in turn will help to ground a new coal pricing approach based on international prices (API2 Index), plus delivery costs from Western European ports. In turn, the imports raise the probability that advantageous coal pricing will be sustained in the future.