BIMCO: More US Coal Exports to Aid Dry Bulk Market

Image Courtesy: Diana Shipping

US seaborne coal exports have turned years of negative growth around and seem to be climbing for a third quarter in a row, according to BIMCO.

The increase is driven by a growing demand from European importers. East Asian buyers have also ramped up their import of US coal, which is beneficial for the dry bulk shipping industry as it generates a substantial amount of tonne-miles, relative to other destinations.

After reaching the lowest levels for exported coal in the third quarter of 2016 since the start of 2007 in terms of total volumes, US coal exports now look to return to recognisable heights and become a dominant player in global seaborne coal transport once again.

“A rising US coal trade has a multiplying effect on the dry bulk shipping industry, as it provides some of the longest sailing distances,” Peter Sand, BIMCO’s Chief Shipping Analyst, said.

US coal exports are up 54% in total volume and 60% in terms of tonne-miles for the first five months of 2017 compared to the same period last year.

The main importers of US coal for the period are the Netherlands, India and Japan, importing 34% of all coal exiting the US via the sea. The most influential importers for the dry bulk shipping industry are India, Japan and South Korea, generating 46% of total tonne-miles.

Europe continues to be the largest importer of US coal and has for the first five months of 2017 imported 44% of all US seaborne coal exports. US coal exports to Europe occupies both the panamax and capesize segment.

East Asian importers are the main reason why tonne-miles are growing more than total volume, despite only 19% of total US seaborne coal exports destined for East Asia in 2017. The East Asian imports of US coal surged 113% in the first five months of 2017 compared to 2016, amounting to an increase of 3.1 million tonnes.

The Americas imported an additional 21% of US seaborne coal during the first five months of 2017 compared to the same period in 2016. This surge in total volume generated an additional 24% tonne-miles.

“BIMCO expects Q2 2017 to go beyond the levels seen in Q1 2017 in terms of tonne-miles and deliver the highest second quarter demand in four years. If US coal exports remain high throughout 2017 it will have a solid effect on the global seaborne coal trade and support the overall improvement in the dry bulk shipping industry,” Sand added.

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