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If Coal Is Dead, Then Why Are Ships So Full Of It?

If Coal Is Dead, Then Why Are Ships So Full Of It?

By Greg Miller of FreightWaves,

Amid all the talk of global warming, climate change-induced…

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This article was originally published by Zero Hedge
If Coal Is Dead, Then Why Are Ships So Full Of It?

By Greg Miller of FreightWaves,

Amid all the talk of global warming, climate change-induced catastrophes, decarbonization and green finance, the global trade in “dirty” coal is enjoying an ironic renaissance. Bulk ships are busy transporting coal to Asia — and to eco-conscious Europe — boosting freight income for some of the very shipowners who publicly tout their environmental bona fides to investors.

“Turns out the news of the demise of coal has been greatly exaggerated,” said Stifel analyst Ben Nolan in a new client note. “Despite an unseemly carbon footprint, coal demand is actually accelerating this year.”

Freight rates buoyed by coal

Coal is transported aboard larger bulkers known as Capesizes (ships with a capacity of around 180,000 deadweight tons or DWT), as well as on sub-Cape vessels such as Panamaxes (65,000-90,000 DWT) and Supramaxes (45,000-60,000 DWT).

According to Clarksons Platou Securities, Capesize spot rates averaged $32,800 per day on Monday, with Panamaxes at $31,800 and Supramaxes at $31,600. It’s rare in dry bulk shipping for all three segments to simultaneously top $30,000, as they have for the past five weeks.

“Strong activity in the coal markets as well as robust minor bulk volumes remain the driving force of elevated rates across the different asset classes,” said Clarksons.

The Financial Times recently pointed out that coal commodity pricing is outpacing both real estate and financial stock returns this year. The price of high-grade Australian thermal coal (used for power generation) had risen to $151 per ton as of Friday, more than triple its price last September, according to Argus. The price of semi-soft Australian coking coal (or metallurgical coal, used for steel production) was $127 per ton, up almost 80% year to date.

“Year-to-date thermal coal exports from the U.S. Gulf Coast, where exports tend to be very price- and demand-sensitive, are up 194%,” said Nolan.

Thermal coal demand drivers

Some of the extreme weather events being attributed to global warming are now increasing demand for seaborne shipments of high-carbon-emitting coal.

Exceptionally hot weather has hiked electricity usage, which is simultaneously being pushed up by growing economic activity. Higher electricity usage increases demand for thermal coal imports. “This year, a hot summer in Asia has led several of the big consumers, which had been shifting away [from coal], to not shift at all,” said Nolan.

A drought in May in southern China cut that region’s access to hydropower, an alternative to coal. More recently, the problem has been too much water in northern China. This month’s tragic floods in Zhengzhou are curtailing coal moves from inland sources. China’s state planner reported that coal transport from Inner Mongolia and Shanxi through Zhengzhou to eastern and central China has been “severely impacted.”

Hot weather is simultaneously boosting prices and lowering reserves of natural gas, which competes with thermal coal for power generation. “Even in Europe, which is the epicenter for decarbonization, low natural gas inventories are driving a sharp increase in thermal coal imports from virtually every nation,” said Nolan.

Restocking for winter

Summer demand will be complemented by restocking for winter demand and inventory rebuilding in general, as well as by demand for coking coal for steel production.

Maritime Strategies International (MSI) noted in its monthly outlook, “China’s National Development and Reform Commission has announced plans to build stocks of over 100 million tons of ‘deployable coal reserves,’ but domestic coal stockpiles are at their lowest levels since February.”

It’s not just China. According to Braemar ACM Shipbroking, “In preparation for the winter season, South Korea, among other nations, has increased coal purchases to avoid energy supply deficits.” South Korea’s July coal imports are on track to hit a five-year high.

Nolan added, “With coal prices currently in regions not seen in a decade or more, there is ample motivation to increase production anywhere and everywhere. Clearly, this is good news for dry bulk shipping moving into winter as coal is often stockpiled in advance and the motivation for such inventory building should be great given the risk of [natural] gas shortages.

“This should lead to some very interesting months starting in September, given how tight the dry bulk shipping market already is currently.”

Decarbonization and Chinese imports

One irony of the current market is that weather events ascribed to global warming are stoking demand for transport of out-of-favor coal. A second irony is that the decarbonization push in China could increase coal-shipping demand even more. 

During last month’s Marine Money Week virtual conference, Magnus Halvorsen, CEO of Norway-listed 2020 Bulkers, explained, “China consumes around 4 billion tons of coal [a year] and imports shy of 300 [million tons], so any change in the import ratio to consumption will have a dramatic impact on import requirements. If China, as part of an environmental crackdown on its domestic production, produces significantly less coal, it’s going to have a strong impact on import requirements.”

According to Aristides Pittas, CEO of EuroDry (NASDAQ: EDRY), “China, for environmental reasons, is going to limit the use of its own coal mines. So, the better-quality coal [from outside China] will benefit, and that will benefit the shipping market.

“We all know coal is a dirty cargo and one that will become obsolete at some point in time,” said Pittas during the Marine Money Week event. “We are all in favor of that. We want a clean world and we want to help. But it doesn’t happen overnight. It doesn’t happen that quickly. And the road to decarbonization will create a lot of inefficiencies. Inefficiencies are usually things that help shipping markets.

“I think coal will surprise people,” said Pittas. “It’s not disappearing yet, so watch out.”

Tyler Durden Fri, 07/30/2021 - 14:28

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Clean Air Power introduces new hydrogen direct injector range

UK-based Clean Air Power, a provider of clean transport solutions, is marking its 25th anniversary working with hydrogen injection products by releasing…

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UK-based Clean Air Power, a provider of clean transport solutions, is marking its 25th anniversary working with hydrogen injection products by releasing a new range of hydrogen injectors for internal combustion engines. The range, which digitally controls hydrogen gas flow into engines, includes a high-pressure direct hydrogen injector that complements Clean Air Power’s existing hydrogen port injector options.

Clean Air Power is naming the extended range DigiJet H2ICE, which will replace its existing ‘ServoJet’ products. This next-generation of products represents an evolution of the current technology, bringing recognized reliability and durability to hydrogen injection and offering a compact and affordable solution.

DigiJet products can be used across a wide range of industries including on-road, off-highway, rail, maritime and motorsport. The release of a hydrogen injector that doesn’t require lubricant helps address the challenges of delivering hydrogen into the combustion chamber of an engine, as well as assisting the increasing move away from fossil-fuel dependence.

The injectors can be provided in configurations and ratings to suit a range of applications.

The addition of direct injection capability to our portfolio is a key step for us, opening up a wide range of new green fuel applications such as hydrogen and ammonia. Our technology has revolutionized gas injection and fluid control during the past quarter of a century, creating new markets for low carbon gas and digital hydraulics. DigiJet will further our reputation for developing affordable, multi-application solutions.

—Dan Skelton, CEO of Clean Air Power

Clean Air Power DigiJet Precision Injectors are widely used in the natural gas industry for multi- and single-point gas injection and are certified to the European standard ECE R110. All natural gas injector body and internal parts are constructed from stainless steel with maximum operating pressure differential ranges from 75 to 300 psi. Options include drop-in mounting, with flying pigtail leads or quick connection applications, while coils are available for 12-24v DC. Every unit is thoroughly tested for flow delivery, pressure leaks and performance.

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House Passes Debt-Limit, Government Spending Bill, Sends It To A Senate Showdown

House Passes Debt-Limit, Government Spending Bill, Sends It To A Senate Showdown

As expected, in a surprisingly close, 220-211 vote, the Democratic-controlled…

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House Passes Debt-Limit, Government Spending Bill, Sends It To A Senate Showdown

As expected, in a surprisingly close, 220-211 vote, the Democratic-controlled House passed a bill that would suspend the U.S. debt ceiling into December 2022 and provide the government funding to operate past Sept, 30 if it passes the Senate which it most likely won't because Senate Republicans, even RINOs such as Mitt Romney, have vowed to block it over the debt limit provision which Democrats purposefully included in the provision.

The political standoff raises the chances of twin fiscal disasters -- a government shutdown and a default -- that could have devastating consequences for Wall Street and the broader American economy.

It's not yet clear what Democrats' plan B would be if the effort to avert a shutdown and suspend the debt limit runs aground in the Senate, as it appears is on track to happen.

If Machin sides with Senate Republicans to block the stop-gap funding measure over the debt limit, there could still be enough time to strip the debt limit measure out and pass a stand-alone spending bill to avoid a shutdown. But the vote would take place perilously close to the shutdown deadline - the drop dead date is sometime in mid/late October - and would likely require cooperation on both sides to process a quick Senate vote. It also would leave the debt ceiling problem unresolved, setting up yet another flashpoint issue to be dealt with by Congress in the weeks to come.

And just to assure that the bill in its current format will not get the support of republicans, moments after the House vote, Senate Republican Leader Mitch McConnell and Republican Senator Richard Shelby introduced a new stopgap measure that keeps the U.S. government funded through Dec. 3 but does not suspend or increase the debt limit.  The Senate bill includes funding for disaster aid, assistance for Afghan allies and Israel’s Iron Dome missile defense system, a provision which was struck from the Democrats' bill to obtain support of progressive democrats.

Earlier on Tuesday, House Majority Leader Steny Hoyer left the door open on what measures the House would take if the Senate is not able to pass what the House sends over before the government runs out of funding next week.

"We want to send it over to the Senate, and give the Senate an opportunity to consider it, figure out what they're going to do and they may send it back to us, at which point in time we will have to make a determination, but we want to pass that bill," he said.

Meanwhile, as reported earlier, the current standoff in Congress makes a government shutdown and a debt ceiling breach increasingly likely according to Goldman, which said in a note published overnight that while "a shutdown October 1 is not the base case, in our view, because there is a fair chance that Democrats will shift strategy before the deadline. However, the longer Congress remains on this course, the more likely a shutdown becomes."

Tyler Durden Tue, 09/21/2021 - 21:19
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Gungnir up 42% on Swedish Nickel Drilling News

Gungnir Resources Inc. [GUG-TSXV, ASWRF-OTC PINK] shares rallied in active trading Tuesday after the company…

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Gungnir Resources Inc. [GUG-TSXV, ASWRF-OTC PINK] shares rallied in active trading Tuesday after the company released additional high-grade nickel results from continuing drilling at its Lappvattnet nickel deposit in Sweden.

Tuesday’s results are expedited assays from hole LAP21-05, located 40 metres along strike from hole LAP21-02, which intersected 3.19% nickel over 4.25 metres.

Drilling highlights from hole LAP21-05 include 2.62% nickel over 5.65 metres within a 14.00-metre interval, grading 1.40% nickel. This drill hole returned high-grade nickel intercepts less than 60 metres below surface.

Gungnir shares advanced on the news, rising 41.6% or $0.05 to 17 cents on volume of 3.68 million. The shares are currently trading in a 52-week range of 13 cents and $0.04.

The Pappvattnet and Rormyrberget nickel deposits are located in the eastern part of the Vasterbotten District, 60 kilometres and 100 kilometres respectively east of the company’s Knaften gold exploration project. The deposits are held 100% by Gungnir under two separate permits covering an area of 471.3 hectares. The properties are accessible year-round with good transportation and industrial infrastructure, including shipping facilities as there are a number of active mines in the area.

They collectively host 177 million pounds of nickel in inferred resources based on NI-43-101-compliant estimates by Gungnir in 2020

The deposits were discovered in the 1970s by the Swedish State Mining Property Commission and were subsequently held by Outokumpu Mining.  Exploration included geophysical surveying, extensive drilling (35,000 metres), metallurgical test work as well as development of an exploration shaft and drifting on the 120-metre level at the Lappvattnet deposit and initial resource estimates for both deposits in 1987.

The deposits came open for staking following exploration work by North Atlantic Resources (NAN), a company owned by Lundin Mining Corp. [LUN-TSX; LUMI-Sweden], and Blackstone Ventures Inc., under an option agreement with NAN in 2006. Gungnir submitted applications to acquire both deposits in 2015.

The Lappvattnet and Rormyrberget deposits are both magmatic nickel sulphide accumulations with tectonic, structural, and geological similarities to documented nickel and copper mines. The Lappvattnet deposit is largely a massive sulphide body that dips steeply to the south and plunges shallowly eastward.

Mineralization at Rormyrberget consists of both massive sulphide and wider disseminated zones.

Lappvattnet contains an inferred resource of 780,000 tonnes of grade 1.35% nickel or 231 million pounds of nickel. Rormyrberget hosts an inferred resource of 36.8 million tonnes of grade 0.19% nickel or 154 million pounds.

Drilling continues with tighter spaced holes at the shallow western part of the Lappvattnet deposit, with a current plan of 15 drill holes covering a strike length of approximately 140 metres.

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