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Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
 With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is interesting to take on a review and outlook of the energy market as a whole. With the Developing nations having played a catch up gain during most of the 2000’s and having been found in a more advantageous position in terms of their continued economic development after the financial crisis of 2008, a considerable weight has been placed on these economies to drive demand forward for most of the energy commodities such as crude oil, coal and natural gas which play an integral part in shipping. Whilst most regions such as North America and Europe, which historically held the lions share for consumption of energy, have been holding steady in their requirements the Astronomical growth in demand from the Asia Pacific region has been the main source of demand growth for much more than a decade now.
China has been the main reason for those, with a key part having been played in the past by Japan and North Korea as well and India now quickly stepping up to take up it’s as a main contender. As these economies went through their stages of economic development, it was well known that an exponential increase in energy consumption would be one of the main byproducts of this. However, with time another pattern has slowly started to emerge.
Despite the rapid growth of energy consumption per capita, the growing worries regarding sources of energy and the sustainability and “cleanness” of our energy consumption has pushed for an ever more efficient and innovative mix of energy consumption, in turn driving for an ever slower growth of energy demand compared to the average GDP growth of the global economy. As pointed out earlier this year by the BP in its Energy outlook report, the amount of energy required per unit of GDP is expected to decline by 1.9% per year over the next 20 years while this figure is more than double the decline rate that was noted in the past decade. This means that we are slowly moving to a higher independence from energy, requiring less input to achieve an ever higher economic output. This could even prove to be an underestimate as typically energy plays a more primal role at the early stages of economic development and once both China and India (the current mammoths of global economic growth) get past this stage, they will likely shift their needs respectively causing a further slowdown in energy consumption per GDP.
A second point which will prove to be of more vital importance, though the trend seems to be moving at a slower pace, is how the world economy as a whole is slowly moving away from fossil fuels towards renewable sources of energy, with the latter expected to take a further 5% from the energy mix within the next 20 years. This has its significance on the shipping industry, as its fossil fuels that are transported by sea and they also take up a considerable portion of world seaborne trade.
Further to this we have seen a rapid shift amongst the preference of fossil fuels within the energy consumption mix. Oil has continued its rapid decline is close to losing its dominant position as the primary source of energy, while Coal has made considerable leaps over the past decade with natural gas following close behind. This has been evident within trade as well as the dry bulk market has significantly benefited from the growing importance of coal while the tanker market has been struggling to see an equal amount of growth in demand even before the crisis. This has followed through with an increasing amount of innovation in oil exploration such as that of tight oil and shale gas. This has been one of the important factors why we have seen a shift in trade with the U.S. decreasing its Crude oil imports last year by almost 40 million tonnes, while it was mainly thanks to China and India which in-creased theirs by 11 and 13 million tonnes respectively which helped cover much of this gap and provide the tanker market with some support.
Going forward, it is increasingly difficult to see any support from the market fundamentals that could provide a justification to a fast paced increase in tanker tonnage. Tonne miles are running shorter and shorter and although the demand for the commodity is there it seems that there isn’t much room for further growth in the fleet. The big promise that was West Africa in helping create further tonne-miles will likely be outshined by the slowly increasing production from East and Southern Africa. The Middle East still holds its top podium position with regards to trade exports and is situated fairly close to both China and India when compared to the distance VLs had to take to go around the Cape to get to the U.S. At the same time we expect more pipeline deals with the Far East to be struck by the other main exporter which is Russia.
In conclusion, there may well be an optimistic growth in demand for energy commodities such as crude oil, however it is looking increasingly difficult for this to translate over to increased seaborne trade and although Chinese and India Consumption will likely rise rapidly over the next couple of years , unless there is a rapid change in regional energy imbalances, the growth in shipping requirements is set to hold at a fairly slow pace.
- George Lazaridis - Research Analyst -
Analysts:
Mr. George Lazaridis
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Monday, 25 August 14
API 8 CFR SOUTH CHINA COAL SWAP GAINED DAY OVER DAY AND MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.30 (+0.44%) day on day and decreased US$ 0.20 (- ...
Sunday, 24 August 14
SEA FREIGHT MARKETS STARTING TO LOOK POSITIVE; CAPES DRIVE FREIGHTS HIGHER
COALspot.com: The freight market has strengthen further this week with BDI up 7.19 pct week on week. The BDI was closed at 1,088 points while the B ...
Friday, 22 August 14
INDIAN IRON ORE ROYALTY RISE NOT LIKELY TO HURT STEELMAKERS' MARGINS - FITCH
Fitch Ratings does not expect an increase in India's iron ore royalty rates to have a major impact on the profitability of steel producers in t ...
Friday, 22 August 14
ARBITRATION CLAUSE IN LOU HELD TO REPLACE CHARTERPARTY ARBITRATION CLAUSE
KNOWLEDGE TO ELEVATE
The Claimants had claims for cargo damage against the vessel Owners arising under four bills of lading. The vessel was th ...
Friday, 22 August 14
ICAP ENERGY LAUNCHES GLOBAL COKING COAL DERIVATIVES TRADING
First contract completed and cleared on CME
COALspot.com: ICAP Energy, the energy business of ICAP plc, announces today that it has successful ...
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- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- MS Steel International - UAE
- Deloitte Consulting - India
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
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