Asian coal firms targeting Europe<\/p>\n
LONDON (Reuters): European electricity generators are being
\nincreasingly targeted as a market for Indonesian and Chinese coal
\nexports as the cost of transporting it half way round the world
\nslides to two-year lows.<\/p>\n
\"We're seeing a lot of Chinese coal offered into Europe, more
\nand more Indonesian coal and some Australian is creeping in,\"
\ncoal analyst John Howland of the McCloskey Coal report told
\nReuters on Wednesday.<\/p>\n
The door has been opened by plummeting freight costs for the
\ngiant Capesize ships that work the coal and iron ore trades, and
\nbrokers said it could remain open for much of this year.<\/p>\n
\"The negative trend for Capesize rates will continue for most
\nof this year,\" said a London ship broker. \"We're not seeing high
\nvolumes of coal from Asia yet, but we could see more in the
\nfuture,\" he added.<\/p>\n
An analyst from London shipbroker SSY said the cost of
\ntransporting coal between Newcastle in Australia and Rotterdam
\nhad fallen from a peak of $18.50 per ton in the first week of
\nNovember 2000 to $8.75 per ton this week.<\/p>\n
The cheap freight environment could help Asian producers
\nexpand their markets.<\/p>\n
\"At the moment it looks as if China will be putting out at
\nleast an extra 15 million tons of steam coal this year, and we
\nthink it's looking at markets further afield than Asia,\" said
\nHowland.<\/p>\n
Brokers said that more than half of Europe's total coal
\nrequirements - including metallurgical coal - of about 200
\nmillion tons a year were imported from abroad.<\/p>\n
McCloskey's Howland said that Finland's largest thermal coal
\nimporter, PVO, took a Chinese cargo last month, while there were
\nrumors in the market that two German power stations had also
\nbought Chinese cargoes.<\/p>\n
Denmark's Energie 2 recently bought a Capesize shipment from
\nChina, as did EdF Trading.<\/p>\n
Brokers said that although Europe's traditional supplies from
\nSouth Africa and Colombia had also become more competitive in the
\nnew cheap freight environment, the effect was proportionally
\nhigher on trades from Asia that had a longer sea leg.<\/p>\n
London shipbroker SSY said that Capesize freight had not been
\nso low since the end of the Asia crisis.<\/p>\n
\"Rates continued to plunge last week... Pacific round voyage
\nrates have halved since the end of June, to sit at their lowest
\nlevels since the first half of 1999,\" it said in a market report.<\/p>\n
Brokers said the freight market weakness stemmed from falling
\ndemand for ships in Asia, coinciding with the delivery of an
\narmada of newly constructed ships from Asian shipyards.<\/p>\n
Shipbuilding analyst David Holder of LR-Fairplay told Reuters
\nthat 22 new ships had been delivered so far this year and 16 more
\nwere due, equating to nearly seven percent of the existing world
\nfleet.<\/p>\n
\"That's a fair lump this year, and there are already 52
\nprovisionally booked for construction from 2002 onwards,\" he
\nsaid.<\/p>\n
Other brokers talked of negative demand factors for Capesize
\nships, including a slowdown in Chinese iron ore imports this
\nmonth. \"We've got no proof of that at the moment, but next month
\nthe steel production figures should be down,\" he said.<\/p>\n
The average Capesize ship is almost the size of the Empire
\nState Building and is too large to use the Panama Canal so
\ninstead must pass around its namesake, Cape Horn.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-coal-firms-targeting-europe-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}