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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, 15 September 16
CAPESIZE: LAST WEEK ENDED ON A VERY STRONG NOTE MAINLY DRIVEN BY A ACTIVE BRAZIL MARKET - FEARNLYS
Supramax
With holidays in the eastern hemisphere beginning this week, the sentiment and activity level has been decreasing.
In the Pacific, ...
Wednesday, 14 September 16
THE DRY BULK MARKET REACHED LEVELS LAST SEEN BACK IN 2015 - INTERMODAL
In an earlier column we commented that we are undergoing “shipping’s new (ab)normal” with constrained financing, shift in demand ...
Wednesday, 14 September 16
THE PORT OF NEWCASTLE SHIPPED 12.48 MMT OF COAL IN AUGUST; AVERAGE SELLING PRICE WAS $AU 83.33
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU $1,040.4 ...
Tuesday, 13 September 16
CAPESIZE: BIG STRENGTH SEEN IN THE MARKET THIS WEEK - ALLIED
Capesize - Big strength seen in the market this week, with an upbeat in sentiment amongst owners helping pull up rates fairly quickly and many hold ...
Monday, 12 September 16
THE CAPE MARKET HAS GAINS ON WEEK; THE CAPE INDEX SETTLING AT 1566 POINTS ON FRIDAY
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week. The BD ...
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- Sical Logistics Limited - India
- Parliament of New Zealand
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- The University of Queensland
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
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