Coal prices in Asia jumped as Europe’s move to ban Russian imports of the fuel threatened to deliver a new global supply challenge. However, the European Union will not impose a full ban on imports of coal from Russia until mid-August, according to a media report. The decision was made due to pressure from Germany. Russia is the third-largest supplier of thermal coal and dominates sales to European nations, meaning there’ll be increased competition in a seaborne market that’s experienced unprecedented price swings this year after disruptions. Newcastle coal futures for April jumped 6.4pc to $281 a ton Tuesday, the biggest gain in almost two weeks, according to ICE Futures Europe. That follows a similar advance in Europe. Prices are poised to extend gains as European consumers step up a hunt for alternatives to Russian coal. Miners in Indonesia, the top shipper of coal for power stations, have been approached by some potential buyers from European countries including Italy, Spain, Poland and Germany, said Hendra Sinadia, executive director at the Indonesian Coal Mining Association. It isn’t clear if the suppliers will be able to boost deliveries as they have limited spare capacity and are mandated to first prioritize local demand. Producers in Australia, another key exporter, have flagged they have limited ability to raise sales to Europe. “A lack of investment in new capacity, and relatively strong demand in Asia leaves the market short of filling any gap left by cuts to Russian exports,” Australia & New Zealand Banking Group Ltd. strategists Brian Martin and Daniel Hynes wrote in a Wednesday note. Russia accounted for about 18pc of global exports in 2020, they said. Tight markets for coal and natural gas have created energy shortfalls at a time when wind and hydro have been unreliable in some regions. Europe and Asia have been hit the worst, with skyrocketing prices, while there are threats of power shortages in emerging nations like Pakistan. Rising electricity demand and a lack of new coal supply should keep prices elevated, said David Lennox, a resources analyst at Fat Prophets in Sydney. Even before new sanctions, energy companies in Europe and some parts of Asia were avoiding additional purchases of Russian fuel, and seeking alternatives, in anticipation of further government measures against Moscow. Asian coal prices had declined from a record over the last several weeks, with the Covid lockdowns in China – the top consumer – curbing factory activity and trimming fuel demand. Still, benchmark prices are more than two-and-a-half times higher than a year ago.