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Thursday, 20 February 14
LENGTHY DELAYS TO PANAMA CANAL EXPANSION POSE GLOBAL TRADE RISKS; US COAL PRODUCERS TO GREATLY BENEFIT ONCE COMPLETE, SAYS WOOD MACKENZIE
 Wood Mackenzie expects the recent cost overrun disputes around the Panama Canal expansion to be resolved with limited disruption due to the significance of the Canal to global trade. Significant disruptions will crimp profitability for US LNG producers, create a tighter LNG shipping market and affect the US Gulf Coast petrochemical industry.
"Given the enormous strategic and financial importance of the Canal to Panama, we expect the gridlock to be resolved," says Andrew Buckland, Senior LNG Shipping Analyst at Wood Mackenzie. "If the delays last 6 –12 months, it will have limited impact, as trade will carry on much as it does now, but further delays threaten the investments of a significant number of groups that are set to benefit from expanded capacity on the waterway."
The expansion will benefit users depending on the position of their ports in relation to the canal, particularly the US, whose cargo accounts for 65% of total cargo moved through the canal.
"When completed, US coal suppliers will see some of the greatest benefits from the expansion as they will realise substantial cost and time savings, even when compared with Colombian and Venezuela suppliers. The shortening of the route to Asian markets will result in greater opportunities," added Jaime Correal, Senior Coal Markets Analyst at Wood Mackenzie.
Wood Mackenzie's cross-sector analysis highlights the possible impact of further delays for coal, gas and oil trade:
Coal Industry
- If the canal expansion is further delayed, Australia and Canada could grow its market share in the Asia Pacific, delaying the opportunity for US Gulf coal suppliers to benefit from the expansion.
- US Gulf coal suppliers can achieve savings of about US$4.72 per tonne ($/t) on ocean freight rates using capesize vessels through the Panama Canal when compared with a routing of the same size vessel via the Cape of Good Hope and Sunda Straits. The Canal will save 9.7 days and the cost savings will increase trade of thermal and metallurgical coal from the US to Japan, Vietnam and eventually China via US Gulf Coast ports.
- US suppliers will become more efficient into countries located in the Pacific Coast of South America, especially Chile where Colombian producers have traditionally dominated the coal market.
- Although the expanded canal will accommodate capesize vessels, cargo weight will be limited to less than 140,000 payable load tonnes, which will restrict the passage of fully loaded vessels.
- US coal exports from the US East coast to China will lose the opportunity of capturing additional market share in China and South America.
- The trip to China from the East coast via the Panama Canal cuts 6.2 days and can help to realize savings of US$0.89/t assuming time charter rates of US$60,000/day for a capesize vessel
LNG Industry
- LNG is not currently traded through the Panama Canal as most LNG vessels are too wide to fit through the locks. The expansion project will allow all but the very largest LNG ships to use the Panama Canal.
- A delay until early 2016 will impact the first US Gulf LNG exports from Sabine Pass. This will impose a higher shipping cost to target markets in Asia as ships will need to take a longer route via the Cape of Good Hope. However, the differential between US and Asian gas prices will still make the trade profitable and initial volumes will be small as the project ramps up.
- The LNG shipping market will be tighter (with higher spot-market freight rates) than it would otherwise have been as volumes from Trinidad and the USA will have to travel the long way round to Asia. The LNG shipping market is expected to weaken between now and 2016 as new ships are delivered to the market before new capacity comes on-stream.
Oil Industry
- We do not expect there to be any impact on Venezuelan crude exports to China: Trade will continue to be more cost effective in Very Large Container Carriers (VLCCs) that are too big to fit through the expanded canal.
- Supports higher product prices in Chile and exposes US exports to higher shipping costs.
- Supports product exports via alternate routes.
Editor’s notes:
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions. For more information visit: www.woodmac.com
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
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