How India is following in China's footsteps as the future driver of global energy demand

The extensive growth and energy consumption seen in China through the 2000s and 2010s hint at the magnitude of changes and energy use increase expected in India over the 2030s and 2040s.

• India’s Real GDP per capita at PPP had risen to $7,100 in 2022, a rate China first reached in 2007/08 (“World development indicators”, World Bank, 2023). Real incomes are still less than half the level in China and a sixth of the average for the OECD), so there is enormous catch-up potential.
• Median population age is low at 27.9 years, which China reached in 1998. Massive Population growth averaged 1.1% per year over the 10 years from 2012 to 2022, similar to China’s over the ten years from 1988 to 1998 (“World population prospects”, United Nations Population Division, 2022).
• The share of the population living in urban areas is estimated to have reached 35% in 2022, a level reached in China around 2000 (“World urbanization prospects”, United Nations Population Division, 2018).
• Energy consumption reached 26 gigajoules per person in 2022, a rate China reached in the early 1990s. India’s primary energy consumption per person is less than a quarter of China’s and one-sixth of the average in the OECD economies, again implying an enormous potential to increase as the gap narrows. Total oil consumption climbed to 237 million metric tons in 2022, which China first reached in 2001 (“Statistical review of world energy”, Energy Institute, 2023).

Coal continues to be surprisingly a strongly traded commodity in Asian Markets

Who would have ever thought that Coal, a much hated and maligned commodity would continue to be a strongly traded commodity in 2022? Indonesia, a leading exporter of thermal coal banned the shipments of coal on New Years Day 2022, causing a surge in coal prices. This follows on a record $158 per tonne in October, though it slipped $68 on Dec. 29 according to Refinitiv and Kpler.

A report published in December 2021 by China's State Grid Corporation outlined China's plans to build as much as 150 gigawatts (GW) of new coal-fired power capacity over the 2021-2025 period, bringing the total to 1,230 GW as the first 1,000-megawatt unit of the Coal powered Shanghaimiao plant, the biggest of its kind was completed. The plant will eventually have four generating units adding to more than half of global coal-fired power generation, a 9% year-on-year increase in 2021, according to a report from International Energy Agency published in December 2021, even as US coal powered plans continue to close.
China (US$16.4 billion - 17.3%), Japan - ($15.95 billion - 16.8%) and India ($15.87 billion - 16.7%) were the biggest importers of coal in 2020 compared to China ($19.6 billion - 12.9%), India - $24.6 billion (16.2%) and Japan (US$25.4 billion - 16.7% of total coal imports) in 2019 as reported by Caixin. These three Asian giants will continue to be major Coal commodities players for at least the next decade.

Revisiting an old Commodities classic - "Hot Commodities" by Jim Rogers

Over the holidays I re-read Jim Rogers' classic "Hot Commodities" written back in 2004.

In this book, Jim had colorfully introduced the world of commodity investing as one of the simplest bases by which investors can value companies, markets, and whole economies. In particular, I re-read his predictions written in 2004 on his recommended hot commodities - oil, gold, lead, sugar and coffee - and on the ffect of China on these commodities. At the close of 2021, I have to take my hat off to Jim for being spot on and nailing every single call. Jim's book is available on amazon.