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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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Monday, 29 August 16
THE FREIGHT MARKET WAS STEADY AND FIRM THIS PAST WEEK; BCI ROSE 18.74%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week except ...
Friday, 26 August 16
WEEKLY US COAL OUTPUT UP 0.7% W/W TO 16 MMST: EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16 million short tons ...
Thursday, 25 August 16
SUPRAMAXES ARE BEING FIXED IN REGION OF $9000
Supramax
Due to Chinese coal imports which continues to source much of the tonnage in SE Asia combined with a good flow of mineral exports ex Aus ...
Wednesday, 24 August 16
MARKET INSIGHT
Brazil and the world bid farewell on Sunday to the first Olympic Games in South America in the midst of a finale meant to be both one last bash and ...
Wednesday, 24 August 16
DRY BULK VESSELS FACE CONTINUED DISTRESS - CLEAR ASSET
Dry bulk vessels have faced extreme distress in recent years. With a combination of factors including newer vessels being ordered with up to 5-year ...
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- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
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- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
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- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
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