Fighting in Ukraine hindering trade

According to IHS Maritime and Trade, attacks on the port city of Mariupol have severely disrupted trading and the transport of fuel and industrial supplies in the Ukraine.    The conflict in Ukraine’s Crimean Peninsula has spread to the port city of Mariupol, severely hampering trade of coal and other essential industrial supplies, according to a report from IHS Maritime and Trade.
   In the first significant spell of fighting in nearly a year, rockets from pro-Russian separatist rebel territories struck Mariupol on Jan. 27, killing at least 30 civilians and wounding dozens more. Neither side, however, has taken responsibility for the attack.
   Mariupol is an important trading hub for the Ukraine, especially for commodities like coal, steel and grain. According to data from IHS, trade at the port has been “severely impacted” by the conflict as only 12 vessels called at Mariupol in the fourth quarter of 2014 compared to 135 vessels in the first quarter.
   Figures from the Ukrainian port authority indicate a 71 percent decrease in the export of coke, a carbon-based fuel made primarily of coal, a 39 percent decrease in coal exports, and 17 percent decrease in the export of ferrous metals like steel and iron alloys. The data does show an 18 percent increase in grain exports from Mariupol, but the majority of those shipments occurred in the first half of 2014, well before the recent attacks.
   The adjacent chart shows the sharp decline in the number of vessels calling at Mariupol over the past year.
   Gary Li, senior maritime analyst at HIS, said the conflict has caused coal mines to shut down and disrupted coal supplies to Ukranian cities to the point that the country is now seeking to import coal from other countries like South Africa and Australia. “In November 2014, it was reported that 36,000 tons of Australian coal was unloaded from the Bulk Carrier Hebei Tangshan at Mariupol, mainly for the ironworks in the city,” said Li. “Further shipments might be diverted if the fighting restarts.
   “What is potentially more serious for shippers however,” Li explained, “are EU sanctions that prohibit any EU vessels (flagged, owned) from entering the EU from the Crimea.
   “The current situation is unlikely to improve in the coming months, and the Crimea will continue to see shipping dominated by Russian vessels while the remaining Ukrainian ports will strive to improve facilities in order to recover its previous maritime trade volumes. The global market has had time to readjust to the crisis and it is unlikely to be affected in the short to medium term. Sanctions from the west and reciprocal ones from Russia might be the largest risks to shipping in the Black Sea for the foreseeable future,” said Li.
   In all, fighting in the Ukraine has claimed the lives of an estimated 5,100 people since Russia’s annexation of the territory in March 2014.