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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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Thursday, 05 January 17
UNCHANGED COAL-FIRED TARIFFS PRESSURE CHINA'S GENERATORS - FITCH
COALspot.com: China's decision to keep on-grid electricity prices from coal-fired power unchanged amid higher coal prices will further squeeze ...
Thursday, 05 January 17
CAPE MARKET HAVE KEPT SURPRISINGLY FIRM AND ACTIVE DURING THE CHRISTMAS AND NEW YEAR HOLIDAYS - FEARNLEYS
Supramax
The first week after a slow Christmas break has started off with little activity and softening rates. Not surprisingly, the market is fi ...
Thursday, 05 January 17
COMPARISON OF HONG KONG AND LONDON ARBITRATION - SKULD
KNOWLEDGE TO ELEVATE
Whilst London arbitration is the most popular platform for resolution of charterparty disputes, where the parties involved a ...
Wednesday, 04 January 17
INDONESIA'S COAL PRODUCTION IS ESTIMATED TO REACH 434 MILLION TONS IN 2016 EXCEEDED THE GOVERNMENT'S INITIAL TARGET
Indonesia's coal production is estimated to reach 434 million tons in 2016 exceeded the government's initial target. The Ministry of Energy ...
Tuesday, 03 January 17
BENGKULU TO IMPOSE TOUGHER REGULATION FOR UNPROCESSED COAL AND MINERALS EXPORTS IN 2017 - MEDIA
Bengkulu provincial government is planning to impose tougher regulation for export of coal and mineral in 2017. According to liputan6 online portal ...
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- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
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