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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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Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
Thursday afternoon saw a report that US GDP in Q2 shrank by 32.9%. Now this may have beaten expectations, but it’s a bit like saying that you ...
Saturday, 01 August 20
ASIA HOPE FOR LONG-TERM OIL DEMAND - BALTIC BRIEFING
Oil demand in Asia Pacific might be expected to plunge 1.8m barrels per day (bpd) this year, but there are still strong prospects for growth over t ...
Friday, 31 July 20
SHORT-TERM IMPACT ON THE CHEMICAL SHIPPING MARKET IF THE INDIA-CHINA DISPUTE ESCALATES - DREWRY
Due to the India-China dispute, the threat of deteriorating trade relations between the two countries has become real. Meanwhile, we expect freight ...
Friday, 31 July 20
PANAMAX: THE PERIOD MARKET REMAINS QUIET WITH FEW FIXTURES REPORTED - FEARNLEYS
Capesize
After weeks of dropping rates, there are finally some resistance for the Capes. Pacific rounds improving to upper15,000s by the middle ...
Friday, 31 July 20
PANDEMIC SENDING SOUTH AFRICAN COAL INDUSTRY TO EARLIER GRAVE - IEEFA
Could South Africa’s coal export industry, one of the largest in the world, be about to take a severe hit from the coronavirus?
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- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
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