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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, 26 May 14
Q3 14 CFR SOUTH CHINA COAL SWAPS LOST 2.24% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.24 percent month on month and closed at US$ 73.88 per mt as on F ...
Monday, 26 May 14
NEWBUILDING ORDERING ACTIVITY RISES BY 78% IN DWT TONNAGE OVER THE FIRST 4 MONTHS OF THE YEARS, AS OWNERS INVEST$40.5 BN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have plunged into newbuilding orders during the first four months of the year, as overall newbuilding business ended for the first four ...
Sunday, 25 May 14
FREIGHT RATES FROM SOUTH KALIMANTAN TO EAST COAST INDIAN PORTS WERE ASSESSED AT $9.50/MT
COALspot.com: The BDI was closed at 964 points down by 6.13 pct week on week. The Cape Index was lost 172 points or 11.24% week on week and closing ...
Saturday, 24 May 14
DRY BULK MARKET'S RECOVERY IS JUST AROUND THE CORNER SAYS SHIPOWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the weaker than expected market sentiment in the dry bulk market over the course of the past few months, analysts and shipowners alike appe ...
Friday, 23 May 14
U.S. WEEKLY COAL PRODUCTION SLIPS 1.8% WEEK ENDED MAY 17, 2014
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
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- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Parliament of New Zealand
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- The University of Queensland
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
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