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.

 

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

New Australian Navy Submarines to be Japan Built?

Australia should discuss building its next-generation fleet of submarines overseas, the Department of Defence said on Monday, a shift that could open the door to

Russian Navy Expansion Gathers Momentum

The Russian Navy celebrates its professional holiday by putting two new submarines into service and expects a new warship in the fall and several additional ships

Three Share in Navy US$96.8-M Twin-Ship Modernization Contract

The U.S. Department of Defense informs that AMSEC LLC; CDI Marine Co. LLC; and Q.E.D. Systems Inc., (all located in Virginia Beach, Virginia) are each being awarded a cost-plus-fixed-fee/cost-only,

Bulk Carrier Trends

GPA Sets Tonnage Record

The Georgia Ports Authority moved more than 29 million tons of cargo, 3 million twenty-foot equivalent container units (TEUs) and more than 700,000 auto and machinery units in Fiscal Year 2014.

Diana Shipping Invests in Diana Containerships

Diana Shipping Inc., a global shipping company specializing in the ownership of dry bulk vessels, has announced that it has entered into an agreement to purchase

Private Buyers in Iran Look to Boost Grain Market

One sign of change in Iran as it works toward a nuclear deal with world powers is the way it is feeding itself, with private grain firms beginning a slow return

Finance

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Cummins Reports Revenue Jump in Q2 2014

Cummins Inc. reported its results for the second quarter of 2014. According to the report, second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013.

GPA Sets Tonnage Record

The Georgia Ports Authority moved more than 29 million tons of cargo, 3 million twenty-foot equivalent container units (TEUs) and more than 700,000 auto and machinery units in Fiscal Year 2014.

News

Webb Institute Ranked a Best Value College

Webb Institute, an undergraduate institute specializing in Naval Architecture and Marine Engineering, ranked number two on Money magazine’s list of Money's Best Colleges,

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Evergreen Enhances UK and Ireland Services

Global container carrier Evergreen Line announced enhancements to its services to/from Dublin (Ireland) and Liverpool (Northwest England). From its hub in Rotterdam,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Navigation Pod Propulsion Salvage Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2705 sec (4 req/sec)