Spanish dry bulk: what a difference a year makes
Last year proved to be something of a banner year for Spanish dry bulk traffic.Total volume handled amounted to 88.5mt (million tonnes), which was an 11.5% increase over the 79mt reported for 2011.
As ever, Gijón topped the list, handling 14.5mt, which was growth of 15% over 2011. Thereafter,Tarragona and El Ferrol, with around 10mt each also did well, the former posting growth of 17%, that latter of 21%. However, it was the Mediterranean port of Cartagena, with an increase of 33% that registered the strongest performance, while the Spanish North African enclave,
Melilla, with a 38% loss of traffic — albeit on a volume of just 20,000 tonnes — did worst.
The latest figures released by Spain’s National Ports Authority (Puertos del Estado), which cover the first quarter of this year, show an overall loss of 15% in dry bulk volumes, which amounted to 18.258mt, as opposed to the 21.440mt reported for the first quarter of 2011.
Significantly, eight of last year’s leading ports, reported losses on the quarter: Gijón (–7%),Tarragona (–32%), El Ferrol (–26%), Cartagena (–13%), Huelva (–12%), Almería (–15%), Barcelona (–6%) and Avilés (–23%). Only Bilbao (+9%) and Santander (+1%) reported gains and handled 1.156mt and 723,181 tonnes respectively.
The biggest overall loss for the quarter was posted by the small, northwestern port of Vilagarcía, whose meagre dry bulk traffic fell 47% to 43,978 tonnes, while the biggest gain was reported by Alicante, where volumes rose 44% to 208,893 tonnes.
In 2012, dry bulk traffic at the northern Spanish port of Bilbao amounted to 4,261,691 tonnes, an increase of 6.5% over 2011, which a port authority spokesperson puts down to two factors. The first was a 426,000-tonne increase in coal imports and the second a notable growth in export petcoke traffic following the inauguration of Petronor’s dome silo.
There were other increases, too. Export cement and clinker grew by 217%, equivalent to an additional 225,000 tonnes, while imported soya bean traffic was up 26.5%, as a further 200,000 tonnes passed through Bilbao’s quays.
Brazil continues being the largest market, registering growth on the year of 8%, while Morocco, with traffic increases of 450%, showed the largest overall market growth for the year thanks to export coal. The case of Togo is particularly interesting, in that it went from accounting for zero percent of Bilbao’s dry bulk traffic in 2011 to generating 125,000 tonnes in 2012, based on demand for cement and clinker.
In the first quarter of 2013, the port authority notes that dry bulk traffic grew by a further 9% compared to the same period in 2012, suggesting a positive outlook for the current year. And this has come at a time when the Spanish economy is suffering notably from an imposed cut in public spending.
In terms of investment in dry bulk facilities, Petróleos del Norte (Petronor), which belongs to the Repsol group, commenced operations with its terminal in 2012. The plant was built and is managed by Graneles Sólidos del Norte, a joint venture between the Toro y Betolaza and Ibaizabal companies.
The complex is composed of two buildings for the reception, storing and despatch preparation of dry bulks. One building handles coke and the other sulphur. They cover a combined area of 31,267m2 and absorbed investment of around €20 million. Essentially, they serve the Unidad de Reducción de Fueloil (URF) — coking plant — that Petronor has put into operation inside its refinery, located some 5km from the Port of Bilbao.
The domed silo — the first of its kind to have been built in Spain — can accommodate up to 68,000 tonnes of this commodity. The other warehouse, which has 50% less capacity, handles sulphur inbound from the sulphur purification units at the refinery.
Also in 2012, Befesa Valorización de Azufre inaugurated a sulphuric acid and Oleum production plant, making use of sulphur and sulphur residues to generate electricity. The plant, which cost €70 million to build, occupies an area of 23,365m2. In terms of capacity, the installation can handle around 120,000 tonnes of sulphur and is capable of producing 350,000 tonnes of sulphuric acid and oleum, allowing it to generate around 90,000MW of electrical energy annually.
The Port of Bilbao has more than enough capacity to handle any increase in dry bulk traffic in the near future. This is thanks to the expansion work carried out by the port authority, which on the one hand has allowed companies to increase their overall working area and on the other has enabled new companies to establish themselves here,” says a port authority spokesperson. The Port of Bilbao continues to handle a diverse range of dry
bulk traffic, as the chart above explains. In many respects, Bilbao is an archetypal industrial port, since
much of its territory is taken up by production facilities, rather than simply being a commodity-handling port. Fertiberia, for example, has in place a conveyor system that moves consignments to its own warehouse; Graneles Sólidos del Norte, for its part, has two shiploaders — one for petcoke and another for sulphur — as well as two conveyor belts for coke and other handling sulphur; Befesa Valorización de Azufre is also present, as is Atlántica de Graneles y Moliendas, operating conveyors transporting slag and clinker; Bunge Ibérica has a cereals conveyor; while Biocombustibles de Zierbena handles such things as biodiesel, oil and methanol.
In terms of dedicated dry bulk handling terminals, the port has Servicios Logísticos Portuarios (SLP), Bergé Marítima and Toro y Betolaza, the latter having a continuous loader for sulphur.
Although it is difficult to say exactly how much of the present volume of dry bulk is effectively captive to the Port of Bilbao, clearly this is significant, given the industrial plant to be found on site and surrounding the port itself.
As for vessel size, the 70,517dwt Kyla is the largest ever vessel to call at the port, making four visits in 2008. This vessel is 271 metres long and draws up to 16.97m of water. However, quays dedicated to dry bulk traffic at the port have draught varying between 14m and 25m, thus they can effectively handle the largest bulk carriers afloat, although the market at the port is clearly best served by Panamax vessels or smaller.
In 2012, just west along the coast from Bilbao, the port of Santander handled 3,236,676 tonnes of dry bulk, an increase of 6% over the previous year. According to sources at the port, the increase was mainly down to the buoyant nature of the iron and steel industry located around the Bay of Santander, as well as to a strong performance on the part of imported animal foodstuffs and sugar bound for the province of Castilla y León, which remains one of the Port of Santander’s main hinterland markets.
For the current year, overall volumes are expected to remain similar to those of last year, with export traffic predicted have the best chance of doing well, given that the domestic market in Spain remains depressed.
“In recent years, our most important investment in the dry bulk sector has been in the construction of the new agribulk terminal, which is one of the most advanced of its kind in Europe,” notes the port spokesperson.“Also of note is the money spend on deepening the draught alongside the quayside at Raos 1, which specializes in handling minerals.”
The aforementioned investments, plus those made in previous years, mean that Santander can absorb any foreseeable increase in dry bulk traffic, even if it were to triple in nature.
In order of importance, these are the most important commodities handled by the port: coal, scrap, sodium carbonate, manganese, feedstuffs and fertilizer, cement and sodium sulphate.
Due to a cut-back in thermally-generated electricity in recent years, the amount of imported coal for electricity generation in and around the Port of Santander has fallen substantially in recent times. Clinker volumes have also gone south, with large reductions noted, reflecting Spain’s reduced industrial demand. However, more positively, sugar trade is up, as is that of feedstuffs and iron and steel products.
In general, the port restricts itself to the loading and discharging of cargo, plus storage of consignments on site. However, for certain commodities, some value is added, too, which can be in the form of grading, along with specialist warehousing or packing.
Quizzed as to how much of the existing dry bulk traffic could be regarded as ‘captive’ to the port, the spokesperson notes that up to 60% is definitely in some way linked directly. This is the impact of the iron and steel industry, which is also true of the chemical industry; both have plant close to the port, making sense to use it rather than an alternative outlet. The other 40% effectively chooses Santander over local rivals.
In terms of vessel size deployed on dry bulk services in and out of Santander, the largest calls are made by Panamax bulk carriers. Nothing larger can currently access the port, because of its 13 metre draught limitation. Nevertheless, the port reveals that a project is under way to look into deepening the draught alongside those berths given over to dry bulk handling.
Despite the difficult economic environment in Spain, the north-western port of Ferrol-San Cibrao reported a 44% increase in dry bulk in 2012 to 10,505,476 tonnes. One of the main drivers for this was the high rate of coal discharges at Endesa, which remains one of the port’s main customers in this sector.
For 2013, the aim is to consolidate last year’s performance and also to continue to grow, not just by relying on existing commodities, but also finding new traffic and investment.
In recent times, the port has invested heavily in the development of new infrastructure in the Outer Harbour of Ferrol, allowing new terminals, such at that of Endesa, to be established there. The deeper draught also means that vessels of up to 200,000dwt can be accommodated, with consequent economies of scale. Indeed, by enabling ships drawing up to 20m of water to call, consignments can now be handled that could not previously be accommodated at the existing coal dock located in the Inner Harbour.
With the Outer Harbour now operational, there is sufficient capacity to absorb all foreseeable traffic grown and also accommodate the largest bulk carriers around. If anything, this new infrastructure is allowing Ferrol-San Cibrao to aggressively market itself in the dry bulk market.
Presently, main commodities handled are coal, scrap and bauxite. The closure of the former coal mine that supplied the As Pontes Power Plant has led to an increase in the volume of imported coal traffic for Endesa.
Little in the way of value-added services — other than warehousing — nowadays take place within the port, which sees its current role as one of loading and discharging vessels for subsequent transfer to production plants.
In terms of its ability to retain traffic, most of the bulk associated with feed production is essentially captive, since it is moved to local plants. There is choice in this region of Spain (Galicia), although customer loyalty is also notable and the port has significant gateway potential to serve the rest of Spain, too.
In 2012, no fewer than 453 bulk carriers called at the port, with an average gross tonnage of 27,681. The largest bulk carrier had a loading capacity of 180,646dwt. Not only is vessel size market-driven, but few restrictions remain now that Ferrol- San Cibrao can offer 20m of draught in the Outer Harbour, allowing up to 200,000dwt to be handled there.
The year 2012 was not a good one in terms of dry bulk traffic for those ports — Valencia and Sagunto — managed by Valencia Port Authority. In fact, it posted an 8% reduction, as volume fell from 2.374mt to 2.177mt. However, cereals and flour actually increased by 4.69% to 782,000 tonnes, while fertilizer (both natural and artificial) grew by 2.73% to 451,000 tonnes. The main loss was in cement and clinker, which dropped 15.26% to 461,000 tonnes, which was due to the parlous state of the construction sector brought about by the current economic crisis in the country.
According to the Port Authority, for the current year, dry bulk traffic should be around 2.4mt, although a spokesperson conceded that making an accurate forecast is quite difficult, given that Valencia is not a specialist dry bulk port as such. Indeed, the main focus of Port Authority investment in this area has been in the Port of Sagunto, where shortly woodchip, cement and pet coke will be handled. The investment that has been made in these areas is more than sufficient for existing traffic, but once the economy improves in the medium term, it is expected that large volumes will naturally flow there.
“It isn’t reasonable to expect operators to continue investing in installations before they see a large and sustainable recovery in economic activity,” said a spokesperson.
The Port Authority prefers to talk about ‘loyal’ traffic rather than ‘captive’ traffic in respect of dry bulk. The spokesperson points out that the choice of port in the majority of cases is dictated by the end user and also the cost of moving consignments inland.
As for vessel size, this is dictated by the draught, which can vary between 14m and 16m depending on the terminal. To date, this has proved more than sufficient for those companies involved in dry bulk handling.