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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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Thursday, 16 April 20
MARKET INSIGHT - INTERMODAL
As everyone anticipated the results of the OPEC + G20 meeting last week, it was very interesting to watch the reaction of tanker rates that were in ...
Monday, 13 April 20
SUPRAMAX: A 56,000DWT SHIP WAS FIXED DELIVERY PARADIP, REDELIVERY CHINA, AT $4,700 - BALTIC BRIEFING
Capesize
The Capesize market this past week looks to have come off life support and found some improved sentiment. The week began rather ordina ...
Saturday, 11 April 20
FAQ: COVID-19 AND CLUB COVER - UK P&I
KNOWLEDGE TO ELEVATE
The Coronavirus (COVID-19) pandemic has generated a significant number of enquiries and questions from Members in recent ...
Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,500,000-1,620,000 Metric Tons (M ...
Friday, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
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- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
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