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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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Wednesday, 02 July 14
HANDY BULKERS PROVE TO BE THE MOST SOUGHT AFTER VESSELS OVER THE PAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The Handy dry bulker proved to be the most sought after ship by ship owners active in the second hand market, which saw a slight decline in terms o ...
Wednesday, 02 July 14
SHIPPING: MARKET INSIGHT - GEORGE DERMATIS
After 6 months, 57 ministerial meetings and 67 political agreements, the journey of the Greek Presidency in the EU reached its end yesterday; only ...
Tuesday, 01 July 14
INDIAN POWER PLANT COAL STOCKPILES VERY LOW
COALspot.com: According to today's Weekly Dry Bulk Report published by Commodore Research, Indian power plant coal stockpiles have now fallen t ...
Monday, 30 June 14
SUB-BIT FOB INDONESIA COAL PRICES ARE STILL STRUGGLING TO RECOVER
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 30 June 14
WEEKLY CFR SOUTH CHINA COAL SWAPS DECLINE CONTINUES; Q1'15 LOST US$ 4.55 PMT IN A WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in Q3 fell US$ 5.25 month on month on Friday, dipping under $69 a tone. The CFR South Ch ...
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- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Planning Commission, India
- Petron Corporation, Philippines
- Trasteel International SA, Italy
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