• 2021 October 28

    Fuel, grain and metal: how Russia feeds its Baltic neighbors

    Coal terminal in Tahkoluoto (Finland). Image source: Rauanheimo

    Although 9M’2021 throughput of Russian ports climbed by almost 2%, handling of Russia’s foreign trade cargo in the ports of Finland and the Baltic states decreased. Nevertheless, Russia loaded foreign terminals with more oil products, coal, grain and ferrous metal.

    Over the 9 months period of 2021, throughput of Russian seaports rose by 1.8%. The increase was driven by coal, oil products, containers and ferrous metal. As for the flow of Russia’s foreign trade cargo via the neighboring Baltic seaports, it saw a decrease. According to the statistics of RF Transport Ministry, the ports of the Baltic states handled almost 19% less cargo than in the same period of the precious year with the flow of Russian cargoes via Finland having decreased by almost 5%.

    At the same time, the Baltic states have seen an increase of Russia’s oil cargo. Over 9 months of the current year it has surged 1.5 times to nearly 750,000 tonnes distributed among all Baltic terminals. That reflects the general growth of oil products export from Russia. Domestic terminals have seen an increase by 3.2% to 110.5 million tonnes, mostly dark oil products. Light oil products were primarily delivered to the domestic market as we wrote earlier >>>>

    The Baltic states were also ‘regaled’ with Russia’s grain and ferrous metal. Grain is actually a sensitive segment in the Baltic Basin of Russia. There are no dedicated terminals in Saint-Petersburg or the Leningrad Region. There are some in the Kaliningrad Region but that is a different story. The attempts of the Kaliningrad based Sodruzhestvo Soya to build a grain terminal in the Leningrad Region were not baked up and Russian grain is now feeding the economy of the Baltic neighbors.

    The ports of the Baltic states have also increased handling of ferrous metal due to the growth of its export from Russia including that via domestic terminals.

    Covered coal storage facility in Ventspils (Latvia). Photo by IAA PortNews

    The situation with coal is more complicated. Albeit showing an increase in Russian ports, by almost 12%, its exports via the Baltic ports is tending toward zero but is still growing at the Finnish terminals of Tahkoluoto (port of Pori) and Lappohja. It has increased considerably, 1.6 times to 755,000 tonnes. That is interesting because Finland with all its ‘green’ approaches put into operation an automated coal terminal in Tahkoluoto several months ago amid the lack of dedicated terminals in Russia’s Baltic ports (the only one is Rosterminalugol in the port of Ust-Luga). With its automated process, the Finnish terminal has achieved a considerable optimization of railcar traffic and costs. The terminal is fitted with two railcar dumpers, two cargo thawing stations, a stacker, a reclaimer, a shiploading machine, four magnetic cleaning units, crushing equipment and a sampling unit. The terminal can handle up to 350 railcars per day and load Capesize ships with over 40,000 tonnes per day. Environmental safety of the terminal is ensured with the best available technologies. The terminal investor is Rauanheimo, port operator of Finland.

    The experience of Finland suggests that coal handling in the Baltic region is not dead yet. Despite the long-term forecasts of a downward trend in the segment of coal consumption in Europe amid the environmental agenda, the energy crises shows that ‘green’ expectations are not always aligned with reality. That inspires the construction of dedicated coal terminals in the Baltic ports of Russia: let’s see how successful the Primorsky UPK is going to be and how competitive it will be compared to the Finnish terminals.

    Perhaps, the growth of coal handling in Finland amid the near zero handling in the Baltic states with their dedicated terminal and a covered storage facility in Ventspils reflects a political aspect: the relation of Russia with the Baltic states are far from great while the relations with Finland are quite ‘smooth’.

    It should be noted that the key Russian cargoes handled by the Baltic states’ ports are still mineral fertilizers (Baltic states) and ore (Baltic states and Finland). This segment is currently seeing a decrease amid general reduction of exports and the introduction of new facilities in the port of Ust-Luga and Primorsk will severely challenge foreign dry bulk terminals.

    By Vitaly Chernov


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