Dry bulk ship owners are insisting vessels go via the Cape of Good Hope on voyages from South Africa to Mediterranean ports to avoid pirates in the Gulf of Aden – adding 10 days to shipping times, traders said.
Utilities in Italy, Greece and Israel which use coal shipped from Indonesia and South Africa are having to pay higher shipping costs for the longer voyages, utility sources said.
Around 60 per cent of South Africa's 60 million tonnes a year of coal exports goes to European countries and the balance to Asia, mostly India.
"I would say more than 80 per cent of the owners I deal with are refusing to allow vessels to go from South Africa through the Gulf of Aden," said a shipping source at a large international trader.
"They have a standard clause in freight contracts now which gives the master the freedom to choose whichever route he thinks is the safest for the ship and the crew, even if it doubles the voyage time," said the industry source.
Utilities in the Mediterranean have ample coal stockpiles left from 2009 and are unlikely to face generation problems as a result of the increased voyage times, utility sources said.
"As long as you know the route the ship is going to take, and the time it will take, as a receiver you can manage the situation," said another utility source
"There's no need for a strategy change in terms of buying, at this point," he said.
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