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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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Thursday, 14 August 14
INDIA'S PLAN TO START AN INFRASTRUCTURE BOOM AND TO INVEST US$ 1 TRILLION BY 2017 WILL SURELY AFFECT THE DRY BULK TRADE - FEARNLEYS
Handy
The Atlantic Supra market has continued its improving sentiment with rates climbing and TA´s are now up about US$ 900 w-o-w, said Fea ...
Wednesday, 13 August 14
WEEKLY MARKET INSIGHT - KONSTANTINOS KONTOMICHIS SNP BROKER
Being at the peak of the holiday season, August is, as usual, the quietest month in terms of snp transactions, yet it is also a time very critical ...
Wednesday, 13 August 14
WHAT DOES PROJECT CARGO REALLY MEAN TO INSURERS?
KNOWLEDGE TO ELEVATE
Richard Kamppari-Baker, claims manager of FP Marine Risks, explains the challenges of project cargo risk assessment from ...
Wednesday, 13 August 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN CLOSE TO 57 MONTHS LOWS
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price in August. HBA for the month of A ...
Monday, 11 August 14
LARGEST CHINESE TRADE SURPLUS EVER RECORDED IN JULY - BIMCO
China recorded a trade surplus of USD 47.3 billion in July 2014. The record high surplus came on the back of very strong export growth while import ...
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- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- White Energy Company Limited
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- PTC India Limited - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
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