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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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Monday, 24 June 13
INDONESIA COAL SWAP FOR AUGUST 2013 DELIVERY GAINS WEEK ON WEEK
COALspot.com – Coal prices for immediate supply contracts have started moving up, but prices for next year supply shows a negative trend ...
Sunday, 23 June 13
BDI CROSSED ITS PSYCHOLOGICAL BARRIER THIS WEEK - VISTAAR
COALspot.com : The BDI crossed the psychological barrier of 1000 points after many months and closed at 1,027 points, which were up by 14.11 pct wee ...
Sunday, 23 June 13
SHIP PRICES NOT FOLLOWING FREIGHT MARKET FUNDAMENTALS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Although it's been the case in many occasions in the past, it appears that ship prices haven't been quite following freight market fundamentals, i ...
Friday, 21 June 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United states the world’s second largest coal producer produced totalled approximately 19.70 million short tons (mmst) of ...
Thursday, 20 June 13
CAPESIZE : FINALLY A SUBSTANTIAL IMPROVEMENT IN RATES! - FEARNLEYS A.S
Handy
Atlantic market kept a steady curve from last week. US Gulf positions fetched tick above USD 21k for Cont/Skaw direction, and vessels fixed f ...
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- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Aditya Birla Group - India
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Australian Coal Association
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
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- Independent Power Producers Association of India
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- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
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- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Deloitte Consulting - India
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- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
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