We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 21 January 21
LNG MARKET RIDING HIGH, BUT WILL THE GAINS CONTINUE? - DREWRY
The LNG market started 2021 on a high note with Asian spot prices crossing $30 per MMBtu while LNG shipping rates recorded a high $350k per day due to freezing temperatures and tight vessel supply. However, the current market conditions are poles apart from the supply-demand fundamentals with the market slated to be in super-backwardation.
Since October 2020, LNG prices have risen 300% to average $18.57 per MMBtu in January 2021 as some spot deals for end-January and early February have already been concluded in the range of $20-30 per MMBtu. The spur in Asian spot LNG prices has been so strong that it has surpassed the growth in Bitcoin value, highlighting just how ‘hot’ LNG has become as a commodity.
There are several factors that have contributed to the meteoric rise. First and foremost is lower-than-usual temperatures across Europe and Asia. While the former has tapped into its storage inventories with daily withdrawal rates reaching new highs, the latter has been taken by surprise with most of the countries ill-prepared to meet higher LNG demand for heating.
Second, the push from coal to gas in the power generation sector has further increased LNG demand in Asia, particularly in China and Japan. In China, landed LNG prices at terminals were recorded at $33 per MMBtu while prices for trucked LNG supplies have risen much higher. The government has further capped LNG usage in industrial and energy sectors with high gas shortages looming large. In Japan, the country’s inability to restore its nuclear power generation units after the Fukushima disaster a decade ago has increased its reliance on LNG for power generation. The Japanese government has encouraged voluntary cuts in power consumption with power prices reaching ¥250 per KWh (or $700 per MMBtu).
Both countries are scouring for LNG cargoes and are being forced to pay higher amounts. Some Japanese LNG buyers were also reported to be sucking LNG carriers empty instead of leaving behind the usual 5-10% to maintain tank temperature. The sky-high spot LNG prices have also forced other Asian countries such as India, Pakistan and Bangladesh to defer spot cargo procurement, raising worries of looming gas shortages in the countries. Furthermore, the surge in Asian LNG appetite has caused a diversion of Europe-bound cargoes to Asia and those from Russia to Asia through the Northern Sea even in icy January.
On the supply front, production issues in Australia, Qatar, Norway and the US coupled with lower production levels in other LNG exporting countries due to COVID-19 has squeezed the market to an extent in 2020. US LNG exports have risen since, with record exports in November and December. The current market is favouring US LNG exports to Asia with an extensive US-Asia price arbitrage. Henry Hub gas prices have been relatively stable at $2.70 per MMBtu while average Asian LNG spot prices were $18.57 per MMBtu. This translates to a netback of around $60-70 million, as a US LNG cargo bought at around $10 million is sold in Asia for $60-80 million.
In this respect it is worth noting that Nigeria LNG’s LNG Abalamabie is on its way to load from the US Freeport LNG terminal. The vessel is on the most expensive voyage after being chartered by BP for $350k per day and is expected to deliver cargo to Europe relieving a lower chartered vessel for an Asian delivery .
What lies ahead?
Cold temperatures are likely to extend to February and March keeping LNG demand high in Asia. However, congestion at the Panama Canal congestion is easing with more vessels moving from the US to Asia transiting through the Suez Canal. Meanwhile, LNG supply is expected to grow with Australia’s Prelude FLNG and Egypt’s Damietta LNG restarting in 1Q21
Therefore, Asian LNG prices are set to fall in 2Q21, but will be higher year on year supported by a boost in LNG imports from Asian countries which had deferred spot supplies due to an increase in prices. Also, European storage will be depleted by the end of winter, triggering many LNG cargoes moving towards the region.
The rise in LNG prices is beginning to stabilise with Asian spot futures for March deliveries at $9.47 per MMBtu. Over the summer, we expect LNG spot prices to average between $5 per MMBtu and $6 per MMBtu. The US-Asia spread will narrow in the coming months curtailing US LNG exports to the region and triggering cargo cancellations, albeit at a much lower level than the estimated 180 cargoes cancelled during the summer of 2020.
Meanwhile, LNG vessel supply will ease with 63 LNG carriers scheduled to be delivered in 2021 of which 31 are planned for 1Q21. Shipowners are trying to advance their vessel deliveries to take advantage of the ‘hot market’ with Flex LNG advancing the delivery of two of its vessels. Sinokor Merchant is also re-activating three of its laid-up steam turbine carriers for the spot market.
In a broader perspective, the current cold snap is expected to bring life to long-term contracting of LNG supply as countries will look to improve their preparedness for winter in addition to meet the higher LNG demand due to decarbonisation activities. This will also spur LNG project developers looking to reach FID in 2021-22. We believe the Panama Canal congestion will be less severe in 2021, but will worsen with rising US LNG exports which will choke the passage in the coming years. Therefore, LNG projects on the US West Coast, Mexico and Canada have an advantage over their East Coast counterparts as they would bypass the Panama Canal for shipping cargoes to Asia.
However, the major question is whether LNG prices will touch the same highs in the next winter season. The early outlook is negative, as we expect buyers to be better prepared for the next winter with a likely rise in floating cargoes. Nevertheless, LNG demand will grow at a faster pace, tightening the availability of LNG carriers next winter and thus raising shipping rates close to current levels. Prepare to see more long-term chartered newbuild orders in 2021.
Source: Drewry
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
Wednesday, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
|
|
|
Showing 666 to 670 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Australian Coal Association
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
|
| |
| |
|
