US Coal Exports Support Dry Bulk Shipping

Panamax and capesize set to benefit from a forecast 19% rise in exports this year

News ID: 75140

Date: 23 July 2017 - 12:37

According to MANA, THE US is expected to export 19% more coal this year than in 2016, a move that, if realised, should bolster demand for panamax and capesize bulkers.

According to the US Energy Information Administration, the country is due to export 72m short tonnes of thermal and coking coal, up from 61m tonnes. More than half the volume was exported through Atlantic coast ports, such as Norfolk in Virginia and Baltimore, with less than a third from US Gulf ports.

Panamax and capesize vessels should benefit from the higher exports since they are the workhorses of carrying US coal, said market participants.

According to Doyle Trading Consultants, about two thirds of the coal was shipped on panamax vessels from the US east coast last year, while the rest moved on capes. About half of the exports went to Europe, with 30% moving to Asia and about 18% sent to Canada and South America.

Similarly, capesize tonne-miles increased to 106bn in January to April 2017 from 86bn over the first four months last year, AXS data shows.

The biggest growth in shipments of US coal will be to China, Japan, Morocco and Turkey, according to Russell Thompson of trade data specialist Tradeviews.

China will see imports more than treble to 2.1m tonnes in 2017 versus a year earlier, while Morocco's volume is expected to double to about 2m tonnes, according to data by Tradeviews.

Japan's volumes are meanwhile likely to grow by 50% to 6.9m tonnes, while Turkey should see volumes rise to 2.1m tonnes from 1.2m tonnes in 2016, the data showed.

Current metallurgical coal prices close to $165 per tonne and thermal prices near $85 per tonne were competitive for US coal exporters.

US President Donald Trump wants to boost his country’s coal industry in an attempt to create jobs and help the economy. His administration is repealing the Clean Power Plan set up by the previous government, a bill that had incentivised the use of renewables.

With coal exporting capacity of 257m tonnes last year, terminals were being significantly underutilised, especially in the Gulf coast ports of New Orleans and Mobile, with a combined utilisation of only 13% in 2016, the EIA said in a report this week.

And it is not just US ports that will benefit from the additional coal shipments.

Increased coal from Montana would be shipped from Canada's Vancouver port, mainly to South Korea and Japan on capesize vessels, Mr Blumenfeld of DTC said.