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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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Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
Wednesday, 31 July 13
COAL GASIFICATION
IBC’s Coal Gasification conference explores the opportunities for coal gasification investment and development in Asia.
With depleting dome ...
Wednesday, 31 July 13
SUPRAMAX : THE PACIFIC BASIN WAS MOVING ON A POSITIVE PATH - EVA TZIMA
COALspot.com: Cape - Despite holding their ground fairly well early on in the week, Capes in the Atlantic basin gave in to the mounting pressure fro ...
Tuesday, 30 July 13
HARD COAL ON THE WAY TO BECOMING THE WORLD'S MOST IMPORTANT ENERGY SOURCE - VDKI
Press Release : Hard coal continued to be the world’s fastest-growing fossil primary energy source in 2012. It covered about 28% of the world ...
Tuesday, 30 July 13
WIJAYA TRI UTAMA PURCHASES MICROCOAL TECHNOLOGIES' CLEAN COAL UPGRADING FACILITY
- First MCI commercial scale application of proprietary microwave technology to upgrade coal thermal output and reduce pollutants
- MicroCoal to re ...
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- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- The University of Queensland
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Planning Commission, India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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