We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 30 June 22
WHY ARE LNG SHIPPING STOCKS RESILIENT? - DREWRY
LNG shipping stocks are proving resilient despite uncertainties about growth in global GDP, high inflation and the ongoing geopolitical crisis caused by the Russia-Ukraine conflict. Drewry’s LNG shipping equity index increased by 12.7% YTD as of 28 June 2022, outperforming S&P 500 which declined by 19.8% during the same period. Golar LNG stock price surged the most (up 87.9%), while Flex LNG increased by 24.8% and Nakilat by +18.2.%. LNG stocks have mainly benefited from the rising European LNG demand as the region switches away from Russian natural gas. We explore the reasons for the resilience of LNG shipping stocks amid the sell-off in the broader equity market and whether investors should consider adding LNG stocks to their portfolios.
FSRU focused stocks are key beneficiaries
Companies with FSRU exposure have particularly benefited as European countries are opting for FSRUs over their land-based counterparts. FSRU terminals can be installed in one-two years compared to three years for LNG import terminals. Golar LNG’s share price has profited from its exposure to FSRU, the company’s stake in New Fortress Energy (NFE – a leading FSRU player) and high crude oil prices. Amid a buoyant FSRU market, Golar LNG has entered into a contract with Snam to sell its 19-year-old LNG vessel Golar Arctic for USD 287.9mn (EUR 269mn) as an FSRU after conversion. The company has also signed an agreement with Snam to sell Golar Tundra FSRU for USD 350mn. NFE, which has a fleet of seven FSRUs and in which Golar LNG has a stake of 6%, has gained 68.5% YTD.
FSRUs are in high demand with Europe seeking at least 16 FSRUs to replace most of the Russian gas imports. We believe countries like Germany, France and Italy are willing to pay a high premium to acquire the assets, but with only 50 FSRUs (as of March 2022) in operation globally, the demand for FSRU providers has strengthened.
Buoyant market drives new charter wins
The upcoming EEXI and CII regulations and charters’ desire to secure LNG ships amid the geopolitical tensions are other factors driving LNG shipping demand. Flex LNG has won fixed charter for 12 vessels since March 2021, suggesting strong demand for its young fleet, with three of these charter wins in June 2022. Latest charter wins announced in June 2022 extend between seven and ten years, longer than most of the company’s existing charters and suggest increasing preference of charterers to go for longer term charter. Nakilat announced during its 4Q21 results that it has won the term-charter for all the four newbuild vessels delivered between 2Q20 and 1Q22.
LNG shipping prospects
The Russia-Ukraine war has brought the energy sector to the center stage with more focus on the LNG industry as Europe tries to wean away from Russian LNG imports and is ramping up its LNG import facilities by investing in FSRUs. As the coming years should see more FID for LNG liquefaction projects, leading to higher demand for LNG ships, we expect spot and long-term LNG shipping rates to firm up. LNG shipping companies stand to benefit from this high charter rate environment. Expectations of tight LNG supply and European geopolitical tensions is accelerating sale and purchase agreements for LNG and in turn, FIDs for new LNG projects. Charterers are preferring long-term charter to cover volatility in a tight supply market. While new order momentum is high in 2022 YTD with close to 100 LNG ship orders, we expect LNG shipping rates to continue to rise as most of the new orders have firm charter.
Upcoming EEXI and CII regulations to support LNG freight rates
As EEXI and CII regulations come into effect from 1 January 2023, we expect an increase in conversion activity of older stream turbine vessels into FSU for import projects as we believe these vessels will be more impacted by the new regulations. While these vessels will need to reduce their speed to comply with the regulations, the very old vessels will become unviable and will exit the fleet, affecting capacity and consequently supporting higher freight rates.
More borrowing capacity with a healthier balance sheet
LNG shipping companies have a healthier balance sheet at the end of 1Q22 compared to 4Q20. Furthermore, an increase in LNG vessel prices since mid-2020 indicates higher borrowings potential which can be used to acquire new vessels. Given the strong prospects, it is comparatively easier now to win a long-term charter compared to the previous two years.
Conclusion
We expect earnings of LNG shipping companies to benefit from positive LNG shipping prospects in the coming quarters. Given the tight LNG shipping prospects and LNG stocks’ resilience thus far, we believe investors can consider adding LNG shipping stocks to their portfolio. We prefer companies with solid revenues, young fleet and healthy balance sheet.
Source: Drewry
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 10 August 22
THE FUTURE OF COAL: EIGHT KEY THEMES FROM THE GLOBAL COAL FORUM - WOOD MACKENZIE
Coal investors face a multi-layered and unavoidable challenge: markets distorted by war, trade constraints and the existential threat of the energy ...
Saturday, 06 August 22
SUMITOMO Q1 PROFIT RISES 45% ON STRONGER PRICES OF COAL, NICKEL - REUTERS
Japanese trading house Sumitomo Corp 8053.T said on Wednesday its net profit for the April-June quarter rose 45% to a record thanks to higher price ...
Saturday, 06 August 22
GERMANY'S ENERGY U-TURN: COAL INSTEAD OF GAS - DEUTSCHE WELLE
Berlin has realized it will never again import as much energy from Russia as before the Ukraine war. So the challenge is to wean Germany off its de ...
Saturday, 30 July 22
NUANCES OF FORCE MAJEURE CLAUSE - BALTIC EXCHANGE
Knowledge to Elevate
In NKD Maritime Limited v. Bart Maritime (No 2) Inc (Shagang Giant) [2022] EWHC 1615 (Comm), Bart Maritime (No 2) Inc (th ...
Saturday, 30 July 22
AEMO URGES QUICKER SHIFT TO RENEWABLES AMID COAL FAILURES AND SOARING FOSSIL FUEL COSTS
The Australian Energy Market Operator has called for an accelerated shift to wind and solar, backed up by batteries and other storage, as a devasta ...
|
|
|
Showing 266 to 270 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- The University of Queensland
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- White Energy Company Limited
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
|
| |
| |
|
