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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, 15 June 14
COAL FREIGHT RATES FALL FURTHER ON LACK OF DEMANDS - CAPT. REDDY
COALspot.com: The BDI softened this week as all segments fell this week. The Panamax sector being most affected. The Cape index was down 3.51 pct w ...
Friday, 13 June 14
US COAL PRODUCTION FELL 3% IN WEEK THAT ENDED JUNE 7, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
Friday, 13 June 14
DRY BULK MARKET KEEPS ON FALLING, DESPITE RESPITE OF THE CAPESIZE SECTOR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on its lacklustre performance overall, with the Baltic Dry Index (BDI) still hovering below the 1,000 point mark. Yest ...
Thursday, 12 June 14
INDONESIA SETS HBA FOR MONTH OF JUNE AT US$ 73.64
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised up first time in last four months the coal bench mark price. ...
Thursday, 12 June 14
HANDY : TA MARKET IS CONTINUING SOUTH WITH A DECREASE OF 26% W-O-W
Handy
The week started off with holidays in most European countries and the TA market is continuing south with a decrease of 26% w-o-w. We do see ...
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- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- GMR Energy Limited - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
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