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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, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
Wednesday, 19 October 22
MARKET INSIGHT - INTERMODAL
The LNG market remains extremely tight, and as a result adding further pressure on the vessel charter market, which is already stretched due to the ...
Sunday, 16 October 22
COULD A RETURN TO SHALE EXPLORATION BE PART OF THE SOLUTION TO EUROPE'S GAS SUPPLY PROBLEM? - WOOD MACKENZIE
The European gas market is in turmoil. Russia’s invasion of Ukraine has shaken things up, triggering a complete rethink of European energy st ...
Thursday, 13 October 22
THERMAL COAL PRICES RETREAT AS WINTER SUPPLY FEARS EASE - REUTERS
The prices of key thermal seaborne coal grades are retreating amid signs that supplies will be sufficient to meet winter demand in both Europe and ...
Thursday, 13 October 22
SPOT COAL BIDDING: CHINESE FIRM WANTS REVISED MECHANISM - BUSINESS RECORDER
Chinese company M/s Huaneng Shandong Ruyi (Pakistan) Energy Limited (HSR) has cautioned National Electric Power Regulatory Authority (Nepra) that i ...
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- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Power Finance Corporation Ltd., India
- The University of Queensland
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
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