Shipping in 2030

"Prophecy is a good line of business, but it is full of risks." So said author Mark Twain. Sticking their necks out are British institutions, in their new report, Global Marine Trends 2030.

 

Demographics will ensure shipping will be prosperous come the year 2030, the study suggests.

The report sees seaborne trade increasing from 9bn tonnes annually to between 19-24bn tonnes.

2030 could usher in a world where China would own a quarter of the merchant fleet, growing from 15% in 2010 to 19 to 24% in 2030 rivalling Greece and the rest of the European countries.

Almost half of offshore oil is taken from the deepest waters and there are 100 times as many offshore wind platforms, while the tanker fleet grows the slowest of all the major ship types.

The team used three scenarios to model the future. These scenarios, using three key drivers – population growth, economic development and demand for resources – describe what maritime trade, sea power and the offshore energy sectors could look like in 2030.

For the purposes of brevity we will take you through the highlights using the ‘Status Quo’ scenario, where the world will continue its current growth momentum with some booms and busts over the next twenty years.

Looking at urbanization, a key driver for shipping, between 2010 and 2030, Southeast Asian nations such as Vietnam, the Philippines, Indonesia and most notably Myanmar catch the eye in terms of the growing percentage of citizens living in cities.

Meanwhile, the four nations with the fastest growing GDP per capita in the time frame are China, Vietnam, India and Indonesia.

“China’s manufacturing sector will be under pressure to transform from labour-intensive to higher productivity business,” the study suggested. “This requires innovative technology to upgrade China’s competitiveness.”

The world’s middle class in 2030 is likely to grow 40-50% from 2010 levels, with China and India counting for nearly two-thirds of this growth. By 2030, China’s middle class will be the second largest, after the US.

GDP rankings per city see China to the fore once again. Shanghai will jump from 19th to third in the world’s city economic rankings. Four Chinese cities, Beijing, Tianjin, Shenzhen and Guangzhou, will be newcomers in the top 20 list come 2030.

All this demographic change will bring big changes to resources demand. China could triple its oil demand, for instance, surpassing the US as the world’s largest oil consumer.

Natural gas consumption, meanwhile, will see China showing the largest growth while interestingly gas consumption will surpass oil in the Middle East by 2030.

In coal, China and India will lead the pack. Around 60% of coal consumption will come from China by 2030, not a good marker for those already concerned with China’s horrendous air quality, where recent surveys show living in the capital, Beijing, is the equivalent of smoking 21 cigarettes a day.

China’s steel consumption growth will slow down, but will remain the number one consumer in 17 years time.

Tanker owners should take note that the British trio reckon the largest increase in seaborne oil trade will come the Arabian Gulf, Black Sea, and Latin America to China and elsewhere in Asia. Middle East to China crude oil seaborne trade is set to grow by 4.5 times from 2010 levels of 126m tonnes to a huge 571m tonnes in 2030. The next biggest growth of Middle East crude sales will be to Southeast Asia, set to grow 4.2 times in the same period to 345m tonnes, the same figure as for South Asia, which the report said could grow by 3.2 times. Such phenomenal growth more than makes up for an expected significant drop in Middle East – US oil trades, as the US weans itself off imports.

Middle East – North America oil trades are expected to decline 74% from 2010’s figure of 88m tonnes to just 32m tonnes. 

As with so much else in this demographic-led report India and China will lead growth in LNG imports through to 2030. Of note, Australia will surpass Qatar as the largest exporter of the chilled fuel.

In container shipping, the greatest growth will be in the Asia-Middle East tradelane over the next two decades. “The Indian Ocean and Asia Pacific will be at the centre stage of the global container market,” the study reckoned.

Ships larger than 7,600 teu will grow 6-6.5 times compared to smaller ships which are set to grow 1.4-2 times over the coming 17 years.

China’s containership share will rise from 18.3% in 2010 to 20.5% to 27.2% in 2030. The Middle East’s share will more than double from 4.3% in 2010 to 8.9 – 10.9% in 2030.

When it comes to shipbuilding China is poised to smash home its advantage, claims the study, more than doubling its output. Emerging nations, led by Vietnam, Brazil, India and the Philippines, will soar more than sixfold.

 “The China factor will still be the big story in 2030. China, consuming three times-as-much oil as it does today and 60% of the world’s coal, will be the marketplace for maritime trade. What is striking is that even in the most negative of the scenarios envisaged, maritime growth is strong.

Issues we have with this in-depth report is the lack of analysis on the genuine game changer that is fracking.  Both the US and China have potentially huge reserves of gas buried deep, which when sourced will mitigate the needs for energy imports. Likewise, given that the report, quite rightly, is so predicated on demographics, the incredible growth in Chinese shipbuilding volumes seems extremely bullish and at odds with China’s rise up the rich ranks.  

Still, as Edgar Fielder wrote in his 1977 book, The Three Rs of Economic Forecasting-Irrational, Irrelevant and Irreverent: "He who lives by the crystal ball soon learns to eat ground glass."

Article Credits: Maritime CEO

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