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, 13 July 22
MARKET INSIGHT - INTERMODAL
Taking the previous market insight a step further, market sentiment remains bullish regarding the overall ROI of scrubbers, facing tailwinds from a ...
Friday, 08 July 22
AUSTRALIAN COAL PRICE BREAKS AGAIN LEVEL US$ 400/TON!, UP AROUND 4% - CNBC INDONESIA
Coal prices shot up again and crossed the level of US$ 400 per ton. On Thursday (7/7/2022) trading, the selling price of August contract closed at ...
Friday, 08 July 22
INDONESIA MULLS MORE FREQUENT SETTING OF CRUDE PALM OIL REFERENCE PRICE - REUTERS
Indonesia is considering setting its crude palm oil (CPO) export reference price every two weeks instead of monthly, a senior trade ministry offici ...
Friday, 08 July 22
BUNKER PRICES EXPECTED TO RECOVER LOST GROUND NEXT WEEK - SERGEY IVANOV, MABUX
Over the Week 27, the world bunker indices showed a sharp decline, primarily due to the fall in oil prices on July 05. The 380 HSFO index fell by 5 ...
Thursday, 07 July 22
NTPC MINES 61% MORE COAL AT 4.22 MN METRIC TONNES IN APRIL-JUNE: PTI
State-owned power giant NTPC on Tuesday said that its coal output grew by 61 per cent to Rs 42.40 lakh metric tonnes in April-June quarter from 26. ...
|
|
|
Showing 296 to 300 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- The University of Queensland
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
|
| |
| |
|
