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Friday, 08 May 20
LNG DEMAND FACED SEVERAL HEADWINDS IN THE FIRST QUARTER OF 2020 - GASLOG
 LNG demand faced several headwinds in the first quarter of 2020 including a warmer than average winter in the northern hemisphere, high inventory levels of natural gas and LNG in several of the largest end markets for LNG and the outbreak of COVID-19, the impact of which has had an uneven distribution around the world during the year to date. For example, Chinese demand was 15 million tonnes (“mt”) in the first quarter of 2020, a decrease of 5% over the first quarter of 2019, according to Poten, but apparent demand in April has increased year-on-year based on vessel tracking data, including several cargoes exported from the U.S., GasLog says in its latest financial report.
Gaslog further noted, meanwhile, demand from Northern Asia more broadly (Japan, China, South Korea and Taiwan) grew by approximately 1 mt in the first quarter or 3% year-over-year. In addition, demand from India grew by nearly 2 mt in the first quarter of 2020 (or 37%) as the country looked to take advantage of historically low gas prices, although apparent demand in April is likely to be lower year-on-year based on vessel tracking data. Finally, demand from Europe grew by over 4 mt (or 37%) as gas pricing favored coal-to-gas switching for power generation and LNG replaces indigenous gas production. In total, LNG demand was 98 mt in the first quarter of 2020, compared to 89 mt in the first quarter of 2019, or an increase of 10%.
Wood Mackenzie currently expects global LNG demand to grow 21 mt or 6% this year, slower than the 26 mt or 7% it anticipated earlier this year prior to the global outbreak of COVID-19. Nonetheless, the demand for LNG over the near-term continues to be uncertain as many LNG importing countries either continue to have in effect shelter-in-place orders which prevent the operation of businesses deemed to be “non-essential” or are in the early stages of reopening their economies. Consequently, measures of global economic activity have declined significantly from comparable periods in 2019. However, the longer-term outlook for LNG demand remains favorable with demand growth of 92 mt estimated over the 2019-2025 timeframe, or compound annual growth of approximately 4%, according to Wood Mackenzie.
According to GasLog's latest financial report, global LNG supply was approximately 98 mt in the first quarter of 2020, an increase of 10 mt over the first quarter of 2019 (or 11%), primarily due to new supply additions in the U.S. (Cameron T1 and T2, Freeport T1, T2 and T3 and Elba Island), according to estimates from Wood Mackenzie. LNG supply is estimated to grow by 22 mt this year as the third train of Cameron begins operations and recent capacity additions continue to increase production. Further ahead, approximately 97 mt of new LNG capacity is expected to begin production during 2021-2025. However, Wood Mackenzie expects the pace of new project sanctions to slow significantly in 2020 due to the uncertainties caused by the COVID-19 outbreak in long-term demand for LNG and low global energy prices, in particular crude oil prices due to oversupply following a collapse in oil demand due to the COVID-19 virus.
In the LNG shipping spot market, tri-fuel diesel electric vessel (“TFDE”) headline rates, as reported by Clarksons, averaged $57,000 per day in the first quarter of 2020, a decrease from the averages of $108,000 in the fourth quarter of 2019 and $59,500 in the first quarter of 2019. Headline spot rates for steam turbine propulsion (“Steam”) vessels averaged $40,000 per day in the first quarter of 2020, a decrease from the average of $78,000 per day in the fourth quarter of 2019 but approximately in line with the $39,000 per day observed in the first quarter of 2019. Slower than expected LNG demand growth due in part to the impact of COVID-19 (as detailed above), high global inventories of natural gas and LNG following a warmer than average winter in the Northern Hemisphere and limited opportunities for LNG arbitrage trading between Atlantic and Pacific basins impacted headline spot rates in the first quarter of 2020.
Clarksons currently assesses headline spot rates for TFDE and Steam LNG carriers at $32,500 per day and $23,000 per day, respectively. The COVID-19 outbreak has introduced significant uncertainty regarding demand for LNG, and consequently, demand for LNG shipping over the near term. The combined impact of the COVID-19 outbreak and normal seasonality may lead to greater volatility in spot rates and to lower utilization of vessels trading in the spot and short-term markets, in particular Steam vessels. In addition, global gas prices and gas price differentials remain near historic lows in the key markets of North Asia and Europe, limiting the opportunities for inter-basin arbitrage trading and likely reducing average voyage distances as well as potentially reducing global output of LNG over the near-term, particularly in the U.S., where a number of cargo deferrals and/or cancellations have been reported for this summer, said GasLog.
As of May 5, 2020, the orderbook totals 118 dedicated LNG carriers (>100,000 cbm), according to estimates from Poten, representing 22% of the on-the-water fleet. Of these, 74 vessels (or 63%) have multi-year charters. The pace of newbuild ordering has slowed significantly relative to 2018-19, with only 4 newbuildings ordered so far in 2020 and all of them ordered against multi-year contracts, an encouraging development for the future supply and demand balance of LNG carriers.
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Wednesday, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Planning Commission, India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- The University of Queensland
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Minerals Council of Australia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
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