Traders in the US and Europe are now exporting coal from Venezuela under licences given by the Trump administration, sources close to the operation told Argus.
One large US-Swiss trading firm has agreed to take several cargoes from a state-owned mine in Venezuela. The deal includes nine cargoes over three months, a party involved in the transaction said, totalling about 300,000t of coal. State-owned Venezuelan mining firms are unable to sell coal to most western countries directly but are now able to export through a small number of international traders who have been granted licences by the US government. Argus understands that the most active trader in the market was able to add coal products to their new petroleum licence.
"We're trying to get involved in that market as much as possible," one trader with an interest in Venezuelan coal told Argus on 24 April.
Most buyers so far appear to be located in central and eastern Europe. Argus is aware of one sale of high-calorific value thermal coal to a Czech buyer and two shipments are currently headed to the Constanta coal terminal in Romania. Steel mills in Poland and Brazil have also bought or shown an interest in buying semi-soft coal or pulverised coal injection (PCI) from the country, participants in the Venezuelan market say.
Other traders are trying to get involved but trading with the country still carries significant geopolitical risk, market participants say, even when the US has granted a licence.
Buyers have shown strong demand for Venezuelan coal and PCI in the past. One thermal product currently on offer has a gross CV of 7,111 kcal/kg, a sulphur content of 0.76pc, a Roga Index of 69 and a volatile matter content of 35.87pc, according to a document seen by Argus. A producer in Venezuela is also working on deliveries of semi-soft coal and PCI, sources close to the operation say, although Argus has not yet confirmed the specifications of these products.
Venezuelan producers used to move a "non-negligible" amount of PCI into the international market, a European trader said, but most people have long forgotten the specifications and quality of the material.
A state-owned mining firm once sold a popular brand of PCI called Guasare from a large coalfield in the west of the country. It is unclear if this brand is coming back into the market, or if another type of PCI is now being produced.
"Guasare is the best brand I'm aware of," a US coking coal supplier said today. "I haven't seen that coal in the market for a long time."
The country is also capable of producing coal for coke ovens, although mills may be limited in how much of the material they can use. A Japanese group conducted a now publicly-available study of Venezuelan coal in 1993 and argued that Guasare coal could be used for 5pc of a coking blend before it deteriorated the quality substantially. Other material, including coal from the state of Tachira, could also be used in small quantities, the group said.
