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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, 09 June 14
API 8 CFR SOUTH CHINA COAL SWAP Q3 14 DELIVERIES LOST 4.61% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 4.61 percent month on month and closed at US$ 71.62 per mt a ...
Sunday, 08 June 14
DRY BULK MARKET RATES FOR PANAMXES TO REMAIN VOLATILE; NO IMPROVEMENTS SEEN OVER THE WEEK
COALspot.com: Cape index increase pushes BDI index to 989 points week on week. The BDI firmed up by 5.88 pct and closed at 989 points week ended 6 ...
Saturday, 07 June 14
EVERYTHING CHANGES, AND NOTHING ABIDES - HERACLITUS
A couple of weeks ago, and while everyone was focusing on the struggling freight market, Russia and China made history by signing a three-decade lo ...
Saturday, 07 June 14
FIRST BITE AT ANTI-CORRUPTION CLAUSE - BIMCO
In recent years a number of countries have introduced anti-corruption legislation which, unfortunately, fails to recognise the practical implicatio ...
Saturday, 07 June 14
U.S. MONTHLY COAL PRODUCTION SLIGHTLY HIGHER IN MAY 2014
COALspot.com – United States the world's second largest coal producer, produced approximately 19.2 million short tons (mmst) of coal in a ...
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- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- PTC India Limited - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
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