22.12.2020

Maritime market update: concluding 2020 and the outlook for 2021

Risavika LNG front month has decreased slightly last week by 0.4 % to 26.40 EUR/MWh. The European gas prices remain supported for front month contracts due to expectation of colder weather after Christmas holidays. However, there is a bearish sentiment due to continuation of the lockdowns as a new covid-19 strain has been found, which can limit industrial demand for the beginning of the year.

Oil products has gained further 5-7 % during last week on the US stimulus package and vaccine news, hoping for the demand recovery in the coming months. The highest gain was for fuel oil 3.5, it closed at 295.55 USD/t for January contracts. Low sulfur oil (MFO 0.5) has increased by 5.4 % and closed at 375.96 USD/t, and MGO 0.1 has increased by 4.9 % week on week and closed at 427.91 USD/t. Same as in the gas market, the new covid-19 strain sentiment has added a considerable pressure on prices this week and uncertainty on the pace of demand recovery.

The 2020 has been undoubtedly a challenging year for maritime business, the global maritime trade plunged by 4.1% this year. Nevertheless, there are many lessons learned because of the pandemic challenges such as improvements in digitalisation, operational efficiency and need for sustainability. The pandemic has strengthened the case for digitalization and eliminating paperwork in the shipping industry, including in ports, the report observes, reinforcing the need for standards and interoperability in electronic documentation. It also has underscored the global interdependency of nations and raised existential questions about globalization and climate change. Therefore, post-covid-19 recovery policies should support further progress towards green solutions and sustainability.

UNCTAD expects maritime trade growth to return to a positive territory and expand by 4.8% in 2021, assuming world economic output recovers. But it highlights the need for the maritime transport industry to brace for change and be well prepared for a transformed post-covid-19 world.

LNG Risavika - LNG FOB Risavika 

LBG Risavika 10 % - 10 % blend of Liquified Biogas

FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes

MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes

MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes

ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes

Source: CME Group, Gasum, UNCTAD

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika