Global commodities trading firm Trafigura expects thermal coal prices to remain high in the near term due to an estimated supply shortage of 3%-5% in 2022, a senior executive said.

Prices of thermal coal, typically used to generate electricity, have shot to record highs due to increased buying by Europe as sanctions on Russia have cut off the bulk of its gas supplies.

“On a fundamental basis, it looks to be very strong for coal,” said Siddharth Choudhary, head of  thermal coal for Trafigura in the Middle East, North Africa and Indian Ocean region. “The supply constraints are for real.”

China could import more coal over the next two to three weeks due to higher local prices, but imports are likely to be flat by the end of the year, he said.

Choudhary said there were no alternatives as the prices of all fuels are high.

“Everything related to energy is in deficit,” Choudhary said. “So there is not alternative. With the current crisis for Europe, coal looks to be the best option.”