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Wednesday, 12 October 16
UK SEABORNE COAL IMPORT PLUNGES 64% AS A WORRYING TREND LURKS - BIMCO
 The main exporters of thermal coal for coal- fired power plants to the United Kingdom (UK) have experienced a heavy decline in seaborne cargo volumes in 2016. This comes as a result of the UK starting a concerning trend for the dry bulk shipping industry, by close to doubling its Carbon Price Floor (CPF).
Russia, Colombia and the United States (US) have been the top coal exporters to the UK for the previous three years. The long hauls from the US and Colombia have historically been strong routes for the dry bulk industry, as they have provided a lot of tonnage miles. Since the UK increased their CPF to £18 per tonne of CO2, the exports from the three main exporters during the first 7 months have declined 69% compared to last year and the UK total import of coal for coal- fired power plants is down 64% for the same period.
Peter Sand Chief Shipping Analyst at BIMCO comments: “This is one of the most significant effects, which has impacted the demand side of the global dry bulk shipping industry in 2016. It reflects something bigger lurking beneath the surface of the coal industry and in transportation of this commodity.
The declining trend in coal consumption in the UK is affecting the dry bulk industry negatively and this story will not be the only one”.
UK carbon price floor increases coal price by 138%
When the CPF first came into effect in April 2013, it was based on the carbon price support (CPS) price per tonne of CO2 on top of the EU emission trading system (ETS) rate per tonne of CO2. At that time the CPS was £0.819 per Gigajoule (GJ). The introduction of this led to closures of several coal plants from 2012-2014 in the UK, with a total capacity of 8.4 Gigawatt (GW), enough to generate electricity for an estimated 6.7 million homes (Total: 25 million homes).
From the beginning of 2016 the CPS was increased to £1.568 per GJ equalling to around £18 per tonne of CO2, operating on top of the EU ETS at €5 per tonne of CO2. In September 2016 this was equivalent to a tax around £63.90 on a tonne coal worth £46.38 (CIF ARA). This increase led to a further closure of 8.2 GW in 2015 and 2016.
The CPF will double again in 2020 to £30 per tonne of CO2 and by 2030 it will be £70 per tonne of CO2.
Peter Sand adds:” Implementing a tax which increased the total price of coal by 138 %, caused an immediate reaction from the UK coal-fired power plants. The dry bulk industry is hugely affected by this, due to a large reduction in long haul thermal coal imports.”
The capacity taken out as a result of closures has put the UK into a position where their domestically produced supply of electricity will struggle to meet peaks in demand. In the case of domestically produced electricity falling short of demand, the UK will need to rely on importing electricity from other European countries.
Depending on the other European countries energy mix, their electricity exports will be a surplus of renewable fossil fuel – or nuclear energy. If the electricity generated comes from fossil fuel it may offset the declining UK coal imports somewhat and the change in demand for the dry bulk shipping industry will be less severe.
Price floor does the trading scheme’s job
While the effect of the UK carbon price floor to coal imports is undeniable, the European Union emission trading scheme (ETS) has not limited coal imports to the same extent. The development of the European ETS rate per tonne of CO2 from €30 in 2008 to the current €5, has not incentivised others to reduce coal consumption on a large scale. The decrease of the EU ETS rate is primarily due to an oversupply in allowances.
K coal consumption has been falling for four years, while the development in EU coal consumption has been more stable. The increase of the CPF level in 2016, caused a decline of 56.7% year-on-year for the first five months of 2016. A total of 6,839 thousand tonnes was consumed in the first five months, compared to 15,800 thousand tonnes in the year before.
Peter Sand comments: “It will be a setback for the dry bulk shipping industry if the CPF becomes a standardised scheme and is adopted by other nations as well as on a supranational level. It will, if introduced at the same level as in the UK, cause a similar development and closure of coal-fired power plants.
France, importing the fourth largest share of coal for European countries (8%) in 2016, has already imposed a CPF on 30€ per tonne of CO2 planned to be introduced in January 2017”.
Source: BIMCO
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Friday, 03 February 17
KOMIPO INVITES BIDS FOR 1.13 MILLION TONS OF BITUMINOUS COAL FOR Q2' 17
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 1,130,000 Metric Tons of Bituminous coal f ...
Friday, 03 February 17
U.S. WEEKLY COAL PRODUCTION DECLINED 3.9% W/W; ROSE 17.7% Y/Y
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.1 million short ton ...
Friday, 03 February 17
US - EXECUTIVE ORDER ON IMMIGRATION AFFECTS VESSEL CREWS - GARD
From 27 January 2017, crew members carrying Iraqi, Syrian, Sudanese, Iranian, Somalian, Libyan or Yemeni passports are temporarily barred from ente ...
Wednesday, 01 February 17
MARKET INSIGHT - PANOS TSILINGIRIS
The recent placement of LOIs for 208kdwt Newcastlemax Newbuildings at $38.5m at Private Chinese Yard identifies with the modern history low for dry ...
Tuesday, 31 January 17
A CASE OF NEW YEAR BLUES FOR THE FAR EAST? - GEORGE LAZARIDIS
Unlike the typical lull in the market that we note during the period just prior to the Chinese New Year, 2017 has proved to be fairly m ...
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- Orica Mining Services - Indonesia
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- PowerSource Philippines DevCo
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- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
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- Xindia Steels Limited - India
- White Energy Company Limited
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- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
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- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
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- Eastern Coal Council - USA
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
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- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
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- PTC India Limited - India
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- Planning Commission, India
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- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
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- Parliament of New Zealand
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
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- The Treasury - Australian Government
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- Meralco Power Generation, Philippines
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- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
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- IEA Clean Coal Centre - UK
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- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
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- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
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- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
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- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
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- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
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- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
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- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
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- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
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- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
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- Wood Mackenzie - Singapore
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