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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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Friday, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Mercator Lines Limited - India
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
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