Within the most up-to-date weekly report, shipbroker Allied Shipbroking documented that “the basis for virtually all of this is the rapid growth in energy intake anticipated to happen among its 1.3 billion human population, something that is relatively simple to feed for such massive growth values across the next couple of years considering that 240 million of them live in rural areas lacking electrical power, when at the same time it features one of the highest growth ranges in new car ownership. Both of these will prove as important factors pushing a near to 30% boost in coal and oil ingestion by 2020”.
Allied’s George Lazaridis, Head of Market Research & Asset Valuations, asserted that “coal is India’s foremost source of energy that represents 40% of its energy mix while taking its stance as third largest developer and consumer worldwide. Seeing that India is predicted to maintain its coal-cantered energy strategy regardless of the global “green” pressure and bearing in mind the improved demand it's going to have for power capacity and electricity generation it's going to be quite interesting to see exactly where it is going to look to serve its requirements considering the fact that ultimately it will find its inner production and reserves substandard to keep up with its improving appetite. Which means although its influence on seaborne coal trade may perhaps remain capped as it takes on campaigns to improve its internal production, if its surge in demand carries on track with what it is now it wont be long before it takes up and holds the lion share in the industry. It is worth bringing up that this year to date it has already exceeded Chinese imports taking up 20% of the coal trade this season, on account of the more supple demand from the preceding market leader, particularly China”, he pointed out.
In the mean time, “things however are quite different in relation to oil, as India is reliant mainly on imports to handle both its consumer and commercial needs. With well over 260m traveller cars expected to be added to its existing car possession over the next 25 years and with its field set to take a much more notable role in the world stage, presumptions are for a similarly favorable boost in demand for both crude oil along with, or maybe more so in oil goods. The sole problem with this is its prime area, positioned significantly closer to the main Middle Eastern producers then any one of the OECD members or China. Which indicate that the benefiting tonne-miles will be much less, although at the end of the day any surge in high demand is definitely welcome”, Lazaridis reported.
So, consider some of the possible dampeners to such positive scenarios? “Well for starters you are always up against the possibility of policy management which can be caused by international environmental issues. This is particularly a worry for coal, that might come about through either a pressure for India to lower it reliance or perhaps via other major consumers moving far from their reliance upon this “dirty fuel”. On the side of oil it seems the biggest dampener may very well be technologies, with recent developments heading in the direction of much more eco-friendly methods of transport. On the other hand, it appears as though there's still something to keep us optimistic for the future”, Allied’s analyst determined.