Panama Canal expansion may aid Colombia coal to Asia
Thursday, 24 Sep 2009
According to shipping analysts and Colombian coal producers, Colombian coal exporters will seek to take advantage of booming demand in Asia when the Panama Canal expansion is completed in 2013.
Colombia the world's fifth largest exporter of steam coal has been hit by falling demand in key European and the US markets and has been the only producing country unable to sell into Asia due to high freight costs.
Mr Will Fray shipping analyst with London based consultants Maritime Strategies International said that "They (producers) potentially could be shipping out coal from Colombia across the Pacific. Obviously it would depend on the size of ship and how they develop this canal.”
Colombia is expected to export around 61 million tonnes of coal in 2009, roughly on a par with Russia and South Africa but below Indonesia and Australia.
Mr Fray added that "The big thing about Colombian coal is it was competing in Europe with South African business, which at the moment has been moving eastwards.”
The Panama Canal Authority will spend USD 5.25 billion to expand and deepen the Panama Canal enabling larger bulk vessels and oil tankers to move commodities into the Pacific markets.
A major Colombian producer said that "The expansion will make it more possible in theory for Colombian coal to move to Asia but there are many factors which make it unlikely to be shipped in large quantities.”
Producer said that "It's far more likely that South African coal will remain cheaper than Colombian for the Asian market outside of India and that production in Australia and Indonesia will grow to meet any increased local demand.”
