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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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Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
Saturday, 10 August 13
DEMOLITION ACTIVITY TO BE CRUCIAL AGAIN IN PROVIDING SUPPORT TO THE DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
We appear to have forgotten demolition activity this year, with the Baltic Dry Index gaining traction in the latter part of the second half and emer ...
Friday, 09 August 13
US PRODUCED 4.00 PERCENT LESS COAL ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.00 million short tons (mmst) of ...
Thursday, 08 August 13
HANDY : NO POSITIVE SENTIMENT FOR THE FAR EAST MARKET - FEARNRESEARCH
Handy
No positive sentiment for the Far East market. There are a number of ships coming open in SE Asia this week and owners rating mid/high USD 8k ...
Thursday, 08 August 13
MALAYSIA HOSTS THIRD ANNUAL ASIAN SUB-BITUMINOUS COAL USERS' GROUP CONFERENCE
Press Release : The third Annual Asian Sub-Bituminous Coal Users’ Group (ASBCUG) conference convenes Sept. 30-Oct. 3 at the Eastern & Orie ...
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- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
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