Thermal coal prices in Turkey rise as Black Sea exports halt

Thermal coal prices in Turkey resumed their upward trend in mid-August following a 15–20% spike in quotations in late July. Shipments of Russian and Kazakh coal through Black Sea ports came to a near-complete halt in August, and market participants expect prices to rise further.

The disruption stems from a series of Ukrainian drone attacks on commercial vessels and a subsequent mass withdrawal of insurance coverage for voyages across the Azov-Black Sea basin. The escalation began with a Ukrainian drone strike on July 23 against the Turkish-flagged bulk carrier Mv Reyhan Sari, which was carrying coal from Taman; one crew member was killed. The vessel’s owner is preparing to file a lawsuit against Ukraine with the International Criminal Court.

On August 3, two more Turkish civilian vessels — Yashar and Nadezhda — came under attack after departing the port of Novorossiysk. Following the repeated strikes on Turkish-flagged merchant ships, Turkey’s foreign ministry called for urgent measures to ensure the safety of navigation in the Black Sea.

This week, offers for Russian coal for September–October delivery via Russia’s northwestern terminals were quoted at around 120 USD/t CFR (the highest level since autumn 2023). Non-Russian material, including Colombian and South African origins, was offered at 130–140 USD/t CFR. The supply disruptions have already driven a marked increase in imported coal prices in Turkey, while the shrinking availability of tonnage and the suspension of the southern route point to further price hikes ahead.

Exporters are attempting to reroute flows through terminals in the Baltic and Barents Seas. However, capacity at northwestern ports is constrained by existing contractual volumes and infrastructure limitations, making full substitution of the volumes previously shipped via Black Sea terminals impossible.

Moreover, Russia’s northwestern ports have themselves repeatedly come under drone attack. On the night of August 14, air defense systems shot down 54 drones over the Leningrad region, one of which struck the port of Ust-Luga, causing a fire at one of the terminals.

Should the attacks continue and shipments from the Azov-Black Sea basin remain suspended, the global market could lose 10–12 mio t of coal in H2 2026, and potentially twice that volume in 2027 if the situation in the region remains unresolved.

Source: CCA