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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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Wednesday, 12 October 16
MARKET INSIGHT - LINOS KOGEVINAS
Another Monday has gone by, bringing with it further turbulence for oil. A series of meetings between high-production nations Russia & Saudi Ar ...
Wednesday, 12 October 16
INDIAN STEELMAKERS' DELEVERAGING AT RISK ON COKING COAL PRICE JUMP - FITCH
The sharp increase in coking coal prices since August 2016 could squeeze Indian steelmakers' profitability and threaten their deleveraging, Fit ...
Monday, 10 October 16
INDONESIAN COAL PRICE REFERENCE HITS HIGHEST LEVELS SINCE SEPTEMBER 2014
COALspot.com: The Indonesia coal benchmark price hits to its highest level since September 2014. The government declared benchmark prices for Indon ...
Monday, 10 October 16
THE FREIGHT MARKET FIRMS UP ON STRONG CAPE PERFORMANCE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose again and ending in a positive note this past week. ...
Friday, 07 October 16
INDONESIA'S DEMAND FOR COAL REMAINS STRONG: BP
Indonesia's domestic demand for coal shows no sign of slowing down as the country is banking on its coal abundance to meet the country' ...
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- PowerSource Philippines DevCo
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- Baramulti Group, Indonesia
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- IEA Clean Coal Centre - UK
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- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
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- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
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- Trasteel International SA, Italy
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- The State Trading Corporation of India Ltd
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- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
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- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
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- Wilmar Investment Holdings
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- Commonwealth Bank - Australia
- Australian Coal Association
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- Tamil Nadu electricity Board
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- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
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- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
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- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- The University of Queensland
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
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- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
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- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
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