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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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Tuesday, 20 May 14
NEWCASTLE'S COAL EXPORT VOLUME UP 39.11 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 19 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
Tuesday, 20 May 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with sl ...
Tuesday, 20 May 14
DRY BULK MARKET IS BOUND FOR A RECOVERY CLAIMS PARAGON SHIPPING'S HEAD MICHAEL BODOUROGLOU
The dry bulk market is bound for a recovery in the coming weeks, as the market will be better balanced, said Mr. Michael Bodouroglou, Chairman and ...
Monday, 19 May 14
INDO COAL SWAPS FOR AVERAGE Q3' 2014 DELIVERY LOST ON WEEK AND ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
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- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Economic Council, Georgia
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- White Energy Company Limited
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- The University of Queensland
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
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