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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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- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- The University of Queensland
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- White Energy Company Limited
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Australian Coal Association
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
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