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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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Sunday, 20 July 14
THE FREIGHT MARKET CONTINUED ITS DOWNWARD TREND
COALspot.com: The market continued its downward trend this week as all segments were down compared to last week. The Cape and Panamax indices being ...
Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
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- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- CNBM International Corporation - China
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Australian Coal Association
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
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