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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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Wednesday, 14 May 14
COAL PRICES IN CHINA HAVE DROPPED TO THEIR LOWEST LEVELS SINCE END-2008
COALspot.com: Coal prices in China have dropped to their lowest levels since end-2008, Fitch says in its latest rating report on one of the coal ...
Wednesday, 14 May 14
ALMOST THROUGH THE HALF OF THE YEAR, THE DRY BULK INDEX SHOW SIGNS OF WEAKNESS; CREATING TO BOTH EXISTING SHIP OWNERS AND POTENTIAL INVESTORS A LOT OF INSECURITY - PANOS MAKRINOS
Almost through the half of the year, the overall shipping market and more specifically the Dry Bulk Index show signs of weakness, creating to bo ...
Tuesday, 13 May 14
NPC COAL EXPORT VOLUMES PLUNGE TO 2.48 MMT WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 12 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Quee ...
Tuesday, 13 May 14
YET ANOTHER POSIDONIA EXHIBITION IS ON ITS WAY - INTERMODAL
With less than a month to go before another Posidonia exhibition starts and all the parties and celebrations get under way we thought that it wo ...
Monday, 12 May 14
TAIPOWER TO IMPORT AROUND 1 MMT OF SUB-BITUMINOUS COAL DURING AUGUST 2014 THROUGH NOVEMBER 2014
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open t ...
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- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
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