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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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Friday, 02 May 14
DRY BULK MARKET SHOWING SIGNS OF COMEBACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market which has been hovering below the 1,000-point market (BDI) during the past couple of weeks, could be exhibiting signs of a s ...
Thursday, 01 May 14
INDONESIA EXPORT BAN POINTS TO QUESTIONS OVER CHINA'S LONG-TERM BAUXITE SUPPLY - WOOD MACKENZIE
China’s Bauxite demand forecast to reach 240 million tonnes by 2030
In light of the Indonesian mineral ore ban that came into force o ...
Thursday, 01 May 14
DRY BULK MARKET STILL REELING UNDER PRESSURE FROM VARIOUS FACTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's revival is still overdue, as the industry's benchmark, the BDI is still lagging below the 1,000-point mark. In fac ...
Wednesday, 30 April 14
FREIGHT MARKET FOR DRY BULKERS STILL REMAINS WEAK - INTERMODAL
One week after the Easter holiday and the celebration for the resurrection of Christ, everybody expected to see a similar sign of a revival in t ...
Tuesday, 29 April 14
Q4 SUB-BIT INDONESIA COAL SWAP CLOSED US$ 1.07 HIGHER COMPARED TO Q2 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
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- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Planning Commission, India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- VISA Power Limited - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- The University of Queensland
- South Luzon Thermal Energy Corporation
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