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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, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
Thursday, 25 July 13
CAPESIZE : PACIFIC AND ATLANTIC RATES ARE HOLDING STEADY - FEARNLEYS AS
Handy
The Far East market remains quiet even if some Indo coal trip orders were fed in the market at early this week. Prompt ships passing Singapor ...
Thursday, 25 July 13
SUMMER LULL CHIPPING AWAY RECENT GAINS IN DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In what seems to be establishing as a permanent trend, at least for the time being, the dry bulk market kept on retreating yesterday, even if this r ...
Tuesday, 23 July 13
NEWCASTLE'S COAL EXPORTS CLIMB 17.82% ON WEEK, PORT'S DATA SHOWS
COALspot.com: Newcastle port in Australia has loaded 3,369,865 tons of coal for the week ended 0700 hours 22 July 2013, Newcastle Port Corp. s ...
Monday, 22 July 13
DRY BULK MARKET DIFFICULT TO MAINTAIN POSITIVE DRIVE CLAIMS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has seen a significant recovery in recent weeks, leading most ship classes to earnings above their operating expenses, thus brin ...
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- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
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