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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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Sunday, 04 December 16
U.S. WEEKLY COAL OUTPUT DECLINED 11.9% W/E 26 NOV; UP 1.4% Y/Y, EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.2 million short ton ...
Thursday, 01 December 16
OIL PRICES MAY SEE LITTLE GROWTH BEFORE 2018, FITCH RATINGS SAYS
High inventories and the potential for US shale production to respond quickly to any market tightening mean oil prices may flat line in 2017 before ...
Thursday, 01 December 16
CHINA 2017 OIL, GAS OUTPUT DROP MAY WORSEN ON CAPEX CUT: FITCH
China's oil and gas production may shrink even more in 2017 than in 2016 after the country's leading oil companies cut exploration and prod ...
Thursday, 01 December 16
ANOTHER WONDERFUL WEEK FOR PANAMAX - FEARNLEY
Supramax
A slower start to the week in the Pacific compared to last Trips from N. China to S. China is paying in the range of low USD 5k, while I ...
Tuesday, 29 November 16
AUSTRALIA'S PORT OF NEWCASTLE SHIPPED 13.08 MT OF COAL IN OCTOBER; DOWN 10.39% M/M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU1,124.7 Mi ...
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- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
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- Parry Sugars Refinery, India
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- New Zealand Coal & Carbon
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- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
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- White Energy Company Limited
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- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
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- Electricity Authority, New Zealand
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- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
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- London Commodity Brokers - England
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- Sojitz Corporation - Japan
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- Trasteel International SA, Italy
- Goldman Sachs - Singapore
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- Planning Commission, India
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- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
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- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
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- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
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- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
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- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
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- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
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- Electricity Generating Authority of Thailand
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- Merrill Lynch Commodities Europe
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- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
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- India Bulls Power Limited - India
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- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
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- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
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- Thiess Contractors Indonesia
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- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
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- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
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- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
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- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- The University of Queensland
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
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- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
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