Coal Trade Rescues Dry Bulk Market, US Gains Traction

Press Release
Wednesday, June 05, 2013

Dry bulk trade grew by an impressive 7% in 2012 with steam coal proving to be the saviour of the freight market, which otherwise would have seen a complete bloodbath, according to Drewry's latest 'Dry Bulk Forecaster'.

Steam coal trade increased by about 18% from 665 million tonnes in 2011 to 784 million tonnes in 2012, supported by high availability and low prices.

The report shows that Global GDP grew by 3.2% in 2012, following growth of 5.2% and 4.0% in the post-recession years of 2010 and 2011. This slowdown blighted dry bulk cargo volumes and in turn tonnage demand. Global steel production, reflecting industrial and growth activity around the world, grew by only 1.3% in 2012, with a subsequent impact on iron ore and coking coal trade.

The US is gaining increasing importance in the steam coal export market. Increased availability of cheap natural gas means it has more thermal coal to sell in the international market. In 2012, the US exported 47.4 million tonnes of thermal coal, up from 31.4 million tonnes in 2011 and 16.6 million tonnes in 2010.

Australian exports have also been on the rise, increasing to 168 million tonnes from 148 million tonnes in 2011, given the proliferation of coal mines in the country.

Indonesian exports, on the other hand, have been steadily declining. From as high as 181 million tonnes in 2010, Indonesian thermal coal exports dropped to 131 million tonnes in 2012. Struggling with shrinking profit margins in the international market, Indonesian traders are shifting their focus towards the domestic market.

Colombia has faced disruption to its coal supply resulting from a ban on night-time railing through urban areas for most of February. There was also a ban on coal loading at Drummond and strikes at Cerrejon’s mines. Furthermore, a bomb attack derailed 17 of Cerrejon’s coal wagons. This resulted in as much as 5 million tonnes of output being lost. Production is expected to recover from the second quarter of the year.

The report considers that of all the bulk commodities in the dry bulk sector, steam coal has the brightest outlook. Steam coal trade is expected to keep rising, driven more by abundant supply than high demand. High availability of coal will keep prices low enough to ensure steep increases in imports. Moreover, freight rates are not expected to recover by much in the next few years, which will further cap CIF prices, thereby supporting buying. Despite having a strong mandate favouring greener fuels, low prices have persuaded Europe to switch to coal.

India and China are expected to drive growth in coal trade. India in particular, is expected to be pivotal to thermal coal trade as its power sector expands rapidly. Given the increase in population and very low per capita power consumption, big expansion plans have been laid out by private power companies. To fuel these power plants, India has been increasingly dependent on imported coal. In fact, by the end of this decade, India’s thermal coal imports are projected to surpass those of China.

“Dry Bulk Forecaster” is a quarterly report published by Drewry Maritime Research and will be available here.

 


Contracts

Banks Halt Support for Hanjin

A bankruptcy would be biggest ever for a container shipper. Hanjin Shipping Co's banks are halting support for the South Korean company, its lead creditor said,

Austal Dives into Loss

Australia’s largest shipbuilder Austal posted a full year loss of $84.28 million because a program to build war ships for the US Navy took longer than expected.

Russian Shipbuilder Signs $1 bln Oil Rigs Contract with Iran

Russian shipbuilder Krasnye Barrikady and Iran's Tasdid Offshore Development Company (TODC)  have signed a deal worth $1 billion to build five offshore drilling

Finance

OSV firm Farstad Continues Restructuring Talks

Supply firm Farstad Shipping's CEO Karl Johan Bakken repeats is in stand-still agreement with lenders until Oct. 1   Notable disclosures: * CEO says is talking

Banks Halt Support for Hanjin

A bankruptcy would be biggest ever for a container shipper. Hanjin Shipping Co's banks are halting support for the South Korean company, its lead creditor said,

China Cosco Sinks into Red

Dragged by lackluster freight rates in the maritime transport market during the first half of 2016, China Cosco Holdings logged a 7.2 billion yuan ($1.07 billion) net loss for the January-June half,

News

Abu Dhabi Ship Building Commissions First Floating Dock

Abu Dhabi Ship Building PJSC (ADSB) has commissioned its first floating drydock located in Mina Zayed as the company looks to expand its commercial service offering.

NAT Names 2 New Tankers in South Korea

wo new tankers, Nordic Star and Nordic Space, were named August 24 for owner Nordic American Tankers Limited (NAT).   NAT founder and chairman Herbjørn Hansson was present at the naming ceremony,

Wounded Lobsterman Medevaced near Cape Cope

An injured lobsterman was medically evacuated by U.S. Coast Guard helicopter crew Tuesday roughly 130 nautical miles east of Cape Cod.   At about 10:15 a.m.,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Pipelines Port Authority Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1588 sec (6 req/sec)