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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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Friday, 09 September 16
U.S. WEEKLY COAL OUTPUT DECLINED SLIGHTLY TO 16.1 MMST, EIA SAYS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.1 million short ton ...
Friday, 09 September 16
CAPESIZE: THE SENTIMENT IS SOLID, SAYS FEARNLEYS
Supramax
A quiet start with Labour Day celebrations in the United States leading to very little being reported from the Atlantic basin. Supramaxe ...
Thursday, 08 September 16
U.S. COAL EXPORTS IN JUNE 2016 UP 29% COMPARED TO MAY 2016, SAYS EIA
U.S. coal production in August was 71 million short tons (MMst), which is 6 MMst (9%) higher than in the previous month and 12 MMst (14%) lower tha ...
Wednesday, 07 September 16
WEEKLY MARKET (TANKER) REPORT - INTERMODAL
What goes around comes around! The Shipping industry is infamous for its seasonality and cyclicality and the tanker sector is no exception to these ...
Tuesday, 06 September 16
INDO GOVT. SETS SEPTEMBER COAL REFERENCE PRICE AT US$ 63.93 PER TON; JUMP 20.17% YTD
COALspot.com: The Indonesia coal benchmark price hits to its highest level since April 2015. The government declared benchmark prices f ...
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- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
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