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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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Friday, 08 August 14
CAPESIZE RATES ARE REMAINING MORE OR LESS UNCHANGED AT BOTTOM LOW LEVELS - FEARNLEYS AS
Handy
An improving sentiment with stronger rates and fair demand for prompt tonnage in the Atlantic, both on the Continent and in the Med for the ...
Friday, 08 August 14
U.S PRODUCED 35.80 MMST OF COAL IN JULY; UP 7.89 MONTH OVER MONTH
COALspot.com – United States the world's second largest coal producer, produced approximately 19.50 million short tons (mmst) of coal in ...
Friday, 08 August 14
PORT OF NEWCASTLE SHIPPED 19.52% MORE COAL IN JULY FROM LAST MONTH
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped 14,036,947 t ...
Thursday, 07 August 14
SHORT-TERM COAL OUTLOOK IMPROVES - SAM QUEST
With demand for and supply of coal to grow in the near future, prices are expected to rebound in the short term; the long-term prospects, however, ...
Thursday, 07 August 14
BULKING UP IN AFRICA: CHINA INFLATES SEABORNE MINERALS EXPORT TRADE - RICHARD SCOTT
Africa’s profile as an exporter of dry bulk commodities is rising. Responding to growing import demand from China, India and other buyers in ...
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- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- White Energy Company Limited
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
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