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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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Monday, 30 January 17
DUE TO LUNAR YEAR HOLIDAYS, THE FREIGHT MARKET STAYED WEAK
COALspot.com: Due to Lunar year holidays and celebration, the Freight market was down in all segments this past week.
The Baltic Exchange, tra ...
Friday, 27 January 17
U.S WEEKLY COAL OUTPUT RISES FOR THIRD STRAIGHT WEEK
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.8 million short ton ...
Wednesday, 25 January 17
MARKET INSIGHT - KONSTANTINOS KAKAVITSAS
Remember that old but classic song called “Destination Unknown”? Well that is where the oil market is heading right now. The song made ...
Tuesday, 24 January 17
MARKET UPDATE - ALLIED
This week at the World Economic Forum in the Swiss resort of Davos we had a historic first via the attendance and speech given by China’s pre ...
Monday, 23 January 17
THE PORT OF NEWCASTLE SHIPPED $AU 15.279 BILLION WORTH OF 161.399 MILLION TONS OF COAL IN 2016
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1,453.1 M ...
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- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- The University of Queensland
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
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