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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, 23 June 14
COAL SWAPS DROPS FURTHER MONTH ON MONTH ON WEAK DEMAND
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 6.91 percent month on month and closed at US$ 69.00 per mt a ...
Sunday, 22 June 14
THE PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA SLIPPED THIS WEEK
COALspot.com: The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell slightly on Friday ...
Friday, 20 June 14
DRY BULK MARKET LOOKING FOR UPSIDE ON ROBUST SEABORNE IRON ORE TRADE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn’t been able to justify the heightened expectations this year. Yesterday, the Baltic Dry Index managed to inch forwar ...
Friday, 20 June 14
US WEEKLY COAL PRODUCTION DROPS 1.8% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- The University of Queensland
- White Energy Company Limited
- Australian Coal Association
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
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