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