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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, 06 May 20
COST CHALLENGES IN A US$20/BBL WORLD - WOOD MACKENZIE
A new approach is needed to ensure supply sector resilience
How will US$20/bbl affect the oil and gas supply chain?
It’s going to g ...
Wednesday, 06 May 20
MARKET INSIGHT - INTERMODAL
It comes as no surprise that activity in the dry bulk SnP market remains soft, with asset values caught in the downward spiral generated by the Cov ...
Wednesday, 06 May 20
FLOATING STORAGE OF OIL CARGOES - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Due to a combination of circumstances there is now a worldwide shortage of storage space ashore for both unrefi ...
Wednesday, 06 May 20
IRON ORE TRADE REMAINS REMARKABLY RESILIENT THIS YEAR, AT LEAST IN ASIA - BANCHERO COSTA
Iron ore trade remains remarkably resilient this year, at least in Asia, despite the global economic impact from COVID-19. In the first 4 months of ...
Tuesday, 05 May 20
SUPRAMAXES: YTD SLIDE HAS BEEN 45%, WITH THE AVERAGE FOR 2020 TCA HOLDING AT US$5,793 - ALLIED
It has been almost three months since the WHO officially categorized the current coronavirus outbreak as a global pandemic, an outbreak that has br ...
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- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
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