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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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Wednesday, 07 August 13
HANDIES : FINDING IT DIFFICULT TO SUSTAIN THEIR PREVIOUS LEVELS - KONSTANTINOS KONTOMICHIS
Broker's insight
by Konstantinos Kontomichis,
SnP Broker
Entering the most predictable month of the year, as expected the seasonal effects ha ...
Tuesday, 06 August 13
UNLEASHING SHALE GAS POTENTIAL AS A GLOBAL ENERGY GAME CHANGER
In its 4th year running, the Annual Shale Gas Conference will bring leaders from North American shale gas operators, key Asian regulators, multi ...
Tuesday, 06 August 13
GBCE APPOINTS BENJAMIN WILEY AS NEW MANAGING DIRECTOR
COALspot.com : GB Clean Energy Ltd. (GBCE) announced today that Mr. Benjamin Wiley has been appointed as Managing Director.
Mr. Wiley has ...
Tuesday, 06 August 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS FALL 23.16 PERCENT ON WEEK TO 2.26 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 15.8 percent week on week to 2.26 million mt for ...
Monday, 05 August 13
PAPERLESS TRADING (ELECTRONIC BILLS OF LADING) - FREQUENTLY ASKED QUESTIONS ("FAQS") - UK P&I CLUB
A number of Members have contacted the Club with queries regarding the use of electronic bills of lading and any potential consequences for P&I ...
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- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Economic Council, Georgia
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