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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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- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Australian Coal Association
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
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