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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, 12 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
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- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Eastern Energy - Thailand
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Economic Council, Georgia
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
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