According to BIMCO US seaborne coal exports have turned years of negative growth around and are climbing for a third quarter in a row. The increase in total volume is predominantly 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.
BIMCO´s Chief Analyst Peter Sand explains "A rising US coal trade has a multiplying effect on the dry bulk shipping industry, as it provides some of the longest sailing distances. East Asian importers source 61% of their US coal from Norfolk, Virginia and Baltimore, Maryland and thereby accept a journey of up to 45 sailing days at an average speed of 13 knots (14,000 nautical miles)”.
US coal consumption numbers released so far only cover the first four months of 2017, but show an increase of 6% compared to the same period in 2016. The production of US coal rose 16% in the same period. This amounts to a surplus of 32 million tonnes of coal for the first four months.
Peter Sand adds: “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”.
The strong freight rates in the Dry Bulk shipping market reflects the employment situation.
Jakob le Fevre, Managing Director MARPRO Search & Selection says; "We are approached by shipping companies from all over the world, who are interested in talent for the Dry Bulk sector. We see that profiles that has typically been engaged in Tank or Projects are now being offered attractive contracts in the Dry Bulk sector".
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Video Source: S&P Global Platts