Evgenia Vanadzina Gasum

Evgenia Vanadzina

Analyst
evgenia.vanadzina@gasum.com
tel. +358401801066

08.12.2020  

Maritime market update: LNG-fueled fleet has grown despite the pandemic

Risavika LNG front month (Jan) has dropped by 1.6 % week on week to 24.10 EUR/MWh on milder weather forecast, thus, lower demand from power sector. Global LNG receipts fell to 29.7 million mt in November from 30.9 million mt a year earlier, according to Argus Media. The drop was mainly the result of European demand shrinking by nearly 30 % to 5.85 million mt. Poland and Lithuania were the only two markets in the region that recorded a slight increase in deliveries last month.

Oil products has gained 0.4-2.5 % during last week on draw from inventories in ARA and hopes for demand recovery, despite the decision of OPEC+ increase oil production by 500 000 BBL/D from January 2021. Fuel oil 3.5 front month has increased by 0.6 % to 274.89 USD/t, low sulfur oil (MFO 0.5) has increased by  0.4 % and closed at 348.66 USD/t, and  MGO 0.1 has increased by 2.2 % week on week and closed at 395.02 USD/t.

Relatively small investments may be needed to complete the supply chain for LNG as a maritime fuel. However, the economic downturn stemming from the Covid-19 pandemic may hamper demand growth by slowing investment decisions in building new LNG-fueled ships or conversions of existing vessels. Despite that the number of LNG-fueled vessels has reached 211 at present, up from 194 at the end of 2019, according to Argus Media.

 

Front Month Price index

LNG Risavika*

LBG blend

Risavika**

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

24.10

27.10

19.71

23.94

27.12

28.74

EUR/MWh

408.27

459.09

274.89

348.66

395.02

400.82

USD/t

 

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

Price index 7.12.2020.png

Source: CME Group, Gasum, Argus Media

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika