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Thursday, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
 The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 million tons by sea, but in 2012 that number had increased to 106.7 million tons. The effect on shipping has multiplied due to the fact that much of the demand growth has come from East Asian countries. With a large part of the US Coal destined for East Asia being shipping out of the US East Coast ports, this will increase the demand for tonnage.
Chief Shipping Analyst at BIMCO, Peter Sand, says: “As a consequence, the transportation demand stemming from US coal exports has surged from 84.7 billion tonne-miles in 2002 to an estimated 707.3 billion tonne-miles in 2012 (835% over the period). In comparison, the Chinese coal imports in 2012 accounted for an estimated 697.6 billion tonne-miles of demand for seaborne transportation. This means the US coal exports was more important to the dry bulk shipping market than the Chinese coal imports in 2012”.
Dissection of the US coal exports
The US exported 22.0 million tons of coal to the East Asian countries of South Korea, Japan and China in 2012, of which 5.1 million tons came from Pacific ports. The Pacific ports export thermal coal to East Asia, while the US East coast and Gulf coast (USEC/USGC) ports export both thermal coal and coking coal. Of the total 22.0 million tons exported to East Asia in 2012, coking coal made up 14.9 million tons (68%) and thermal coal made up 7.1 million tons (32%). 40% of the coal exported to East Asia came from Baltimore, a Capesize-accommodating port that attracts Asian buyers, who also has to accept an extended distance of more than 14,000 nautical miles to reach the port of discharge. Likewise, the US exported 51.3 million tons of coal to the EU in 2012. The main destinations were the Netherlands and the UK with a total of 23.1 million tons. A part of the coal exports to the Netherlands are subsequently transhipped to German buyers. Traditionally, most of the European trade has been for coking coal, but 2012 marked the year where this pattern changed. In 2012, the US exported 27.9 million tons of thermal coal to the EU (54%), but only 23.4 million tons of coking coal (46%). Unlike the exports going to East Asia, all coal exports to Europe came from USEC/USGC ports making the transit distances substantially shorter. The result is that the exports to East Asia are more beneficial for the shipping industry than the exports to the European Union, despite involving much lower volumes.
Thermal coal exports – Reflecting a new energy market in the US
The increased thermal coal exports is explained by the large-scale exploitation of unconventional fuels in the US, which has made consumption of domestic oil and gas relatively cheaper. The average Brent-WTI spread went from nothing to around USD 17 per barrel during 2011 and 2012, while domestic US natural gas prices have halved since mid-2000s.
As a consequence, the domestic consumption of coal fell by 11% to 807.8 million tons in 2012. Since the production only fell by 7.2% to 922.1 million tons, the potential for exports has increased. Meanwhile, European gas-driven power plants suffer from oil-indexed contracts and higher oil prices, making coal the cheapest option for energy in Europe. Working in the same direction was the “collapsing” carbon prices within the EU ETS which only made the appetite for coal more significant. “Back loading” or not in the EU ETS, this is probably going to be the case also in the coming years. The low freight rates during the past two years have also been an incentive for importing coal from countries far away such as the US and Colombia. The thermal coal to East Asia is primarily shipped to South Korea, who has virtually no coal mining industry. The increased South Korean demand for US coal originates from a desire to diversify trading partners to manage rising coal costs.
Coking coal exports – a matter of Chinese steel production
Coking coal demand in East Asia has largely been a result of an increased Chinese steel production. The Chinese steel output in 2012 was four times larger than in 2002, while the production in Japan and South Korea has remained relatively unchanged. As a consequence, China has increased its imports of coking coal, which has benefitted the US as well.
South Korea has traditionally imported coking coal from Australia, Canada and China. However, due to the Chinese domestic demand, South Korean steel mills have to source their coal elsewhere than China, which has benefitted exporting countries such as the US and Russia. Japan has imported less coking coal post-2008, but the country has increased its coking coal imports from the US as a substitute for Australian coking coal, which means that the distances travelled increase fourfold.
In the EU, seaborne coking coal demand has been relatively stable over the last decade, but a larger share is being sourced from the US. In 2002, the US exported 9.9 million tons to the European Union; in 2012, the number had increased to 23.4 million tons. The increased demand for coking coal came from Germany and the Netherlands in particular, but also from Italy, France and the UK. Outlook Looking forward, India could become a medium-term growth factor as the country has experienced very high demand growth for US coal during the past five years. The US exported 6.4 million tons to India in 2012 – all shipped from USEC/USGC ports. Back in the US there are talks about building a large coal export terminal at Cherry Point, state of Washington or in the state of Oregon. One proposal, at Cherry Point near the Canadian border on the West Coast, plans to have a capacity of 48 million tons per year. The terminals would accommodate the large thermal coal reserves in Montana and Wyoming. Out of the 431.1 million tons of thermal coal produced in 2011 in these states, only 15.5 million tons were exported (source: EIA). The terminals are being built to meet the increasing demand for coal-fired power generation in East Asia, and at full capacity, the Cherry Point terminal would create employment for 40 Capesize vessels on an annualised basis. We expect to see a surge in exports if the terminals are built. US thermal coal exports to East Asia in April were slightly up from the same month last year (8%), but down by 24% from the month before which represented an all-time-high in total coal exports. Coking coal is more of a joker, as the April numbers throw a wet blanket over the party. Coking coal exports to East Asia were substantially down from the same month last year (-40%) as well as from last month (-44%). Sources attribute this to lower GDP growth in China combined with a massive oversupply of coal in East Asia. Some analysts therefore expect US coal exports to be 10-15% lower this year compared to last year.
Another potential threat comes from the talks of a Chinese ban on high-sulphur and low-calorific coal, as much of the US coal going to China has a high content of sulphur. In 2012, China imported 8 million tons of coal with sulphur content above 1%. It is however uncertain if Beijing will ratify the coal ban. However the US has lots of low sulphur coal reserves to substitute the high sulphur coal if it is demanded.
“When we look into the future, global demand for thermal and coking coal is set for solid growth with thermal coal being in the driving seat both in terms of volume and percentage growth. If the US can stay price competitive in the market and scale up Pacific port capacity, the longer sailing distances are likely to benefit dry bulk shipping demand along the road” adds Peter Sand.
Source: BIMCO / Hellenic Shipping News
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Sunday, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
Sunday, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
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- Pipit Mutiara Jaya. PT, Indonesia
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- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
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- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Global Business Power Corporation, Philippines
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- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
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- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
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- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
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- Posco Energy - South Korea
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Planning Commission, India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
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- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Parliament of New Zealand
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- Ministry of Mines - Canada
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