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