In this sector, Inland Shipping is used for the logistics of end products: tanker shipping delivers heating oil, gasoline, diesel, and other materials from refineries to storage depots and trading companies. The modal share of IWT can hereby reach more than 50 % and it even goes up to 90 % looking at IWT modal share in the Netherlands for refined petroleum products transport (source: Eurostat).
Crude oil, however, – the input for refineries – is largely delivered by pipeline or by maritime shipping (if refineries are at the seashore).
In Europe, the largest refineries are found in the Rhine area with the biggest production sites in the port areas of Rotterdam, Antwerp and Cologne.
The transport demand for mineral oil products is promoted by high refinery output and low oil prices.
RELATIONSHIP BETWEEN GERMAN REFINERY OUTPUT AND TRANSPORT DEMAND FOR MINERAL OIL PRODUCTS ON THE RHINE
90% : IWT MODAL SHARE IN THE NETHERLANDS FOR REFINED PETROLEUM PRODUCTS TRANSPORT
Transport of mineral oil products on the Rhine is positively correlated with a high refinery output.
The outlook for the refinery output in 2017 is altogether linked with the expected evolution of oil prices. Oil prices reached a level of more than 50 US-$ per barrel at the beginning of 2017.
In 2017, oil prices are expected to increase modestly, which will have a rather negative impact on refinery output and therefore on transport demand for mineral oil products.
The decline of transport demand is expected to be modest, as oil prices should not exceed the threshold of 60-70 US-$ in 2017, due to the re-opening of non-conventional oil drilling fields in 2017.
The transport of mineral oil products is expected to decrease slightly in 2017, due to the expectation of a modest rise in oil prices and therefore a modest weakening of refinery production.
WORLD TRADE OUTLOOK & TRANSPORT TRENDS
RWI/ISL CONTAINER THROUGHPUT INDEX
Source : RWI and ISL calculation
The RWI/ISL Container throughput index is based on data from 81 world container ports covering 60% of worldwide container handling.
This index is an early indicator for world trade and maritime container shipping.
Recent index data point to an increasing container traffic and world trade in 2017 which should as well trigger an increase in IWT container traffic in 2017.
TRENDS IN DEMAND FOR TRANSPORT IN 2017 IN RHINE COUNTRIES
Trends in demand for transport in 2017
Decrease (1st semester) & Increase (2nd semester)
Weather & energy policy, partly steel production
Sand, soil & building materials
Mineral oil products
Oil prices & refinery output
The only difference with previous Market Insight reports concerns the mineral oil products segment where the expected oil price increase in 2017 has led us to change the trend from Stagnation to Decrease. For other segments, main trends ahead remain valid.
Bad harvest results in Western Europe in 2016 will keep having a negative impact on transport of agricultural products at least until the middle of the year 2017. On the other hand, in the Danube region, positive harvest results are increasing the transport demand in this segment.
Also in the steel segment, different trends between the Rhine region and the Danube region are expected: as in the last report, Stagnation in the Western European steel industry, and therefore stagnating transport demand for iron ores and metals is foreseen, and rising transport demand in the Upper Danube Region.
The outlook for coal in Western Europe remains weak, due to the ongoing transition towards renewable energies. According to statistics from the “Working Group on Energy Balances” (Arbeitsgemeinschaft Energiebilanzen – AGEB), the use of coal in the German energy sector fell by 4 % in 2016, while the use of coal in the German steel industry stagnated.
Due to the rising trend in the RWI/ISL Container throughput index, the outlook for container transport in Western Europe is positive; for the Danube region, container transport is still suffering from difficulties in river infrastructure.
The outlook for the liquid cargo sector is mixed. For Western Europe, the ongoing normalisation of oil price levels should lead to a slight decrease in the transport demand for mineral oil products. The transport demand for chemicals, however, is expected to continue its upward trend. In the Danube region, transport demand in this sector is far smaller than in Western Europe.