Gdansk port expansion planned to ease coal imports

Poland's Gdansk port plans to double rail loading capacity by early 2020 to ease bottlenecks affecting coal imports, potentially most benefiting coking coal throughput as thermal coal imports slip.

Operator Port Polnocny is preparing construction of its second rail loading facility at Gdansk, a company executive told Argus. The expansion will allow the port to double the number of coal-carrying trains leaving the site to 18 from 9, and is targeted for completion in early 2020.

Rail bottlenecks represent a significant obstacle, limiting coal throughput at Gdansk. In 2018, the port handled almost 7.2mn t of coal — roughly half thermal and half coking — for a 40pc increase on 2017. Almost all of this was imported, with only marginal volumes of thermal coal re-exported from Gdansk to Scandinavia.

Gdansk port is preferred by importers as it can take Capesize vessels of up to 150,000t.

Other Polish ports include nearby Gdynia and Szczecin-Swinoujscie in western Poland. Gdynia handled 2.6mn t of coal — including both thermal and coking — in 2018, a 24pc increase on the year. But Gdynia can only take cargoes of up to 70,000t. Szczecin-Swinoujscie port's coal imports rose by 60pc year on year to 3.4mn t in 2018, but it can only take cargoes of up to 70,000t and has several limitations and bottlenecks.

Lower thermal imports may boost coking coal capacity

Last year's increase in Polish coal imports was underpinned by fundamentals in both the thermal and coking coal markets, with tight domestic thermal coal supply encouraging power plants to buy additional tonnes in the seaborne market, while central European demand for coking coal imports has been robust.

But Polish market participants said they expect imports of thermal coal to decline in 2019, because stocks have built up and a mild 2018-19 winter has limited coal burn, although volumes are still expected to remain strong. A drop in thermal coal imports would likely free up more capacity for coking coal throughput at Gdansk, they said.

Coal stocks at Gdansk are currently around 1mn t — roughly half of the port's capacity.

Gdansk is a major throughput site for coking coal serving not just Polish coke plants but the central European region as a whole. A significant portion of the material coming in originates from Australia and the US, but other seaborne suppliers are also capitalising on regional demand. Port authorities noted that they are currently handling the arrival of a Canadian coking coal cargo, with the material likely bound for the Czech Republic or Slovakia.