We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 30 June 22
WHY ARE LNG SHIPPING STOCKS RESILIENT? - DREWRY
LNG shipping stocks are proving resilient despite uncertainties about growth in global GDP, high inflation and the ongoing geopolitical crisis caused by the Russia-Ukraine conflict. Drewry’s LNG shipping equity index increased by 12.7% YTD as of 28 June 2022, outperforming S&P 500 which declined by 19.8% during the same period. Golar LNG stock price surged the most (up 87.9%), while Flex LNG increased by 24.8% and Nakilat by +18.2.%. LNG stocks have mainly benefited from the rising European LNG demand as the region switches away from Russian natural gas. We explore the reasons for the resilience of LNG shipping stocks amid the sell-off in the broader equity market and whether investors should consider adding LNG stocks to their portfolios.
FSRU focused stocks are key beneficiaries
Companies with FSRU exposure have particularly benefited as European countries are opting for FSRUs over their land-based counterparts. FSRU terminals can be installed in one-two years compared to three years for LNG import terminals. Golar LNG’s share price has profited from its exposure to FSRU, the company’s stake in New Fortress Energy (NFE – a leading FSRU player) and high crude oil prices. Amid a buoyant FSRU market, Golar LNG has entered into a contract with Snam to sell its 19-year-old LNG vessel Golar Arctic for USD 287.9mn (EUR 269mn) as an FSRU after conversion. The company has also signed an agreement with Snam to sell Golar Tundra FSRU for USD 350mn. NFE, which has a fleet of seven FSRUs and in which Golar LNG has a stake of 6%, has gained 68.5% YTD.
FSRUs are in high demand with Europe seeking at least 16 FSRUs to replace most of the Russian gas imports. We believe countries like Germany, France and Italy are willing to pay a high premium to acquire the assets, but with only 50 FSRUs (as of March 2022) in operation globally, the demand for FSRU providers has strengthened.
Buoyant market drives new charter wins
The upcoming EEXI and CII regulations and charters’ desire to secure LNG ships amid the geopolitical tensions are other factors driving LNG shipping demand. Flex LNG has won fixed charter for 12 vessels since March 2021, suggesting strong demand for its young fleet, with three of these charter wins in June 2022. Latest charter wins announced in June 2022 extend between seven and ten years, longer than most of the company’s existing charters and suggest increasing preference of charterers to go for longer term charter. Nakilat announced during its 4Q21 results that it has won the term-charter for all the four newbuild vessels delivered between 2Q20 and 1Q22.
LNG shipping prospects
The Russia-Ukraine war has brought the energy sector to the center stage with more focus on the LNG industry as Europe tries to wean away from Russian LNG imports and is ramping up its LNG import facilities by investing in FSRUs. As the coming years should see more FID for LNG liquefaction projects, leading to higher demand for LNG ships, we expect spot and long-term LNG shipping rates to firm up. LNG shipping companies stand to benefit from this high charter rate environment. Expectations of tight LNG supply and European geopolitical tensions is accelerating sale and purchase agreements for LNG and in turn, FIDs for new LNG projects. Charterers are preferring long-term charter to cover volatility in a tight supply market. While new order momentum is high in 2022 YTD with close to 100 LNG ship orders, we expect LNG shipping rates to continue to rise as most of the new orders have firm charter.
Upcoming EEXI and CII regulations to support LNG freight rates
As EEXI and CII regulations come into effect from 1 January 2023, we expect an increase in conversion activity of older stream turbine vessels into FSU for import projects as we believe these vessels will be more impacted by the new regulations. While these vessels will need to reduce their speed to comply with the regulations, the very old vessels will become unviable and will exit the fleet, affecting capacity and consequently supporting higher freight rates.
More borrowing capacity with a healthier balance sheet
LNG shipping companies have a healthier balance sheet at the end of 1Q22 compared to 4Q20. Furthermore, an increase in LNG vessel prices since mid-2020 indicates higher borrowings potential which can be used to acquire new vessels. Given the strong prospects, it is comparatively easier now to win a long-term charter compared to the previous two years.
Conclusion
We expect earnings of LNG shipping companies to benefit from positive LNG shipping prospects in the coming quarters. Given the tight LNG shipping prospects and LNG stocks’ resilience thus far, we believe investors can consider adding LNG shipping stocks to their portfolio. We prefer companies with solid revenues, young fleet and healthy balance sheet.
Source: Drewry
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
Thursday, 30 June 22
SPOT AUSTRALIAN THERMAL COAL HAS SURGED, BUT CONTRACT PRICE IS KEY - REUTERS
The spot price of Australian thermal coal is higher than that of coking coal, an unprecedented situation that highlights just how the global market ...
Thursday, 30 June 22
SHANXI PROVINCE RAISES ANNUAL COAL OUTPUT TO 1.3 BILLION TONS TO ENSURE CHINA’S ENERGY SUPPLY - GLOBAL TIMES
North China’s Shanxi Province, a major coal-producing region, recently announced a move to increase its annual coal production output by 107 ...
Thursday, 30 June 22
DIVERGENCE BETWEEN HIGH- AND LOW-GRADE THERMAL COAL PRICES IN APAC TO NARROW - FITCH RATINGS
Prices between high- and low-grade thermal coal in Asia-Pacific (APAC) have diverged since late March 2022, but Fitch Ratings expects the gap to na ...
Thursday, 30 June 22
INVESTMENT IN GLOBAL COAL SUPPLY CHAIN TO HIT $115 BN IN 2022, LED BY CHINA AND INDIA - BUSINESS LINE
At over $80 billion, China and India are anticipated to make up the bulk of global coal investment in 2022, says IEA.
The investment ...
|
|
|
Showing 311 to 315 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Planning Commission, India
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
|
| |
| |
|
