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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, 18 May 14
FREIGHT RATES ARE EXPECTED TO BE FIRM NEXT WEEK
COALspot.com: The freight market was steady with the BDI was closed slightly higher at 1027 points or up 3.00 pct week on week.
The Cape ...
Friday, 16 May 14
KOMIPO IS LOOKING FOR 60K MT OF LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 60,000 Metric Tons (MT) of low volatile bitumi ...
Friday, 16 May 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 15 May 14
PANAMAX : SHORT PERIOD UP TO ONE YEAR REPORTED IN THE 12.000-12.500 RANGE - FEARNRESEARCH
Handy
The Supra and handy market seems to be affected by the recent holidays in Singapore which still relatively quiet. There are some Indo / ...
Thursday, 15 May 14
USA COAL CONFERENCE
Press Release: IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Coal USA Conference, June 18-20, 2014, ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- MS Steel International - UAE
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
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