Coal has to be bought in extremely tense situation on foreign markets – DTEK executive director
The huge shortage of coal that China is experiencing has seriously aggravated the situation on foreign markets and made it difficult to purchase it for the needs of the Ukrainian power generation, DTEK Executive Director Dmytro Sakharuk has said.
"In these conditions, it is extremely difficult to buy coal on foreign markets. Chinese demand is sucking coal from all corners of the world, even the most remote, where there was no China before. Everyone, including Russia and Kazakhstan, will be reoriented to China. Everyone will try to secure this demand from China's side. And it will do everything to provide itself with a resource. The situation in the market is extremely tense," he told to Interfax-Ukraine on the sidelines of the Kyiv International Economic Forum.
According to Saharuk, China's state-owned companies have been tasked with ensuring the passage of the winter peak at any cost, especially now, when the power shortage caused by the coal shortage has begun to affect the industrial potential, as it leads to the restriction of the work of industrial enterprises.
At the same time, he said that China's aggressive entry into unconventional markets was caused by its conflict with Australia, and "Indonesia does not cover such a volume of demand."
"They have issued huge bids for the purchase of coal from all over the world. For next three or six months the market will have a huge demand for it at a very high price due to the demand of China," the executive director of DTEK said, specifying that the price of coal is $260-270 per tonne.
At the same time, he said that despite the lack of financial resources in the context of rising coal prices, the company is doing everything possible to provide its power generation with raw materials. "We are now bringing everything we can. From Poland, Kazakhstan. The contracting of boats is coming from the United States," Sakharuk said, pointing out that there is competition for every tonne of coal.
At the same time, he expressed concern about Ukraine's energy dependence on the Russian Federation. "We are on a hook. At any time, they can close the supply of coal from the Russian Federation or electricity, even if it goes," he said.
At the same time, Sakharuk said that the Ukrainian power generation would not have been experiencing problems with raw materials now if it had the resources to contract them in advance. "In one year and a half or two years, all the money was pulled from the energy sector through unreasonably low electricity tariffs, which had nothing to do with reality. There is no safety factor in the system, and amid high accidents and low coal production, we are experiencing a shortage," the top manager said.
At the same time, Sakharuk said that in the case of DTEK, low electricity tariffs also affected the production of coal by its mines. "For a year and a half we did not have any economic incentive to enter a long-term investment, which has a long resource extraction cycle. If you invest today, you will receive coal in 12-18 months," he said.
At the same time, the executive director of DTEK suggested that after the decline in seasonal demand for coal, the problems of generation, which are now being paid attention to and "a certain consistency has appeared," will again recede into the background. "The demand is seasonal, in six months it will pass. And again the country will turn towards other problems. But this is a complex issue of revising approaches to investment and government regulation. There should be long-term messages that it is possible and necessary to invest in the energy sector, that the investor will receive some understandable income from the money invested. And we will confidently enter the autumn and winter period and prepare for it in a year, and will not run around the world and try to close the seasonal shortage," Sakharuk said, expressing his opinion.
He also said that given the problems with raw materials, the autumn and winter period will be difficult and may be marked by a restriction in consumption. "It is impossible to say that this winter will be simple, understandable and there will be no disruptions. Europe is already preparing for a serious restriction of consumption. Compulsory. How can Ukraine avoid problems against this background?" Sakharuk said.
According to him, the current situation with energy resources in the world has shown, as never before, the importance of the issue of protecting national interests. "You see, every man for himself. The issue of national protectionism generally comes first," the executive director of DTEK said.