A shipment of Russian-origination thermal coal has become distressed after arriving at the Moroccan port of Jorf Lasfar last Tuesday, May 2, but not unloading, sources said Monday.
The 75,000 mt parcel aboard the Panamax Nord Sirius was said to have been purchased by Moroccan power generator Jorf Lasfar Energy (JLEC) for its 2,056-MW power plant near El Jadida in a recent tender, but failed to discharge on quality concerns, leaving the vessel stranded on the water.
The material was said to have a dry volatile matter of 38, higher than JLEC's maximum specification of 35, according to a source with knowledge of the matter. JLEC was not available for comment.
"The cargo is not bad...it is just the volatile matter is higher than JLEC's maximum limit," the source said. "They [seller of the cargo] will find a home for it, but it will probably cost them quite a lot to do so."
The Nord Sirius -- which loaded Russian coal at Ventspils, Latvia, April 20 -- was seen idling off the coast of Morocco, according to cFlow, S&P Global Platts trade flow software.
The coal was said to have been supplied by London-headquartered trader Trafigura as part of a buy tender which JLEC had awarded in the mid-$80s/mt some weeks previously.
Sources said the coal had been bought at levels around $81-$83/mt CIF, and values had fallen as much as $10/mt in the weeks since.
"Moreover, everyone knows it is a distressed cargo...so they will be squeezed," a source said.
A Trafigura spokesperson said the company had identified the issue with the cargo and agreed not to ship the material to JLEC, and declined to give further information on the status of the ship or the cargo.
In previous tenders, JLEC has sought thermal coal with a minimum calorific value of 5,800 kcal/kg NAR, minimum 9% ash and maximum 1% sulfur.
The news followed reports of a prompt bilateral deal for 75,000 mt of Russian 6,000 NAR kcal/kg May-loading coal at $72.50/mt for delivery at an unspecified European destination, concluded May 4, an effective discount of $1.25/mt against associated futures contract prices at the time.
With both Russian and South African sellers still holding cargoes for prompt May-loading, spot prices could come under further pressure, sources said.
JLEC regularly tenders for thermal coal spot cargoes for its plant, the largest in Morocco and which supplies a third of the country's electricity supply.
