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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, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
Wednesday, 17 July 13
NEWCASTLE COAL EXPORTS FELL 3.85% ON WEEK
COALspot.com: Newcastle port in Australia has loaded 2,860,149 tons of coal for the week ended 0700 hours 15 July 2013, Newcastle Port Corp. s ...
Wednesday, 17 July 13
TORN BETWEEN A CREDIT CRUNCH AND SUSTAINABLE GROWTH - GEORGE DERMATIS
COALspot.com: In 2012 China expanded at a rate of 7.8%, its worst annual performance in 13 years, raising criticism over the newly appointed governm ...
Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whet ...
Monday, 15 July 13
INDONESIAN GOVERNMENT HAS REVISED DOWN ITS JULY BENCH-MARK COAL PRICE TO US$ 81.69 PER MT
COALspot. com - Indonesian Coal Price Reference dropped 3.75 % and hitting a 2013 low. The Indonesian government has revised down its owned coal ben ...
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- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
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