Week 01 - EA Gibson

Gas Report
Week 05
29th January 2015
WEEK 05
GAS REPORT
29th January 2015
LNG/LPG/PETCHEM REPORT
LNG____________________________________________
Egypt took a big step forward in the process of
becoming a serious importer of LNG this week by
agreeing to purchase 75 cargoes from BP, Noble,
Trafigura and Vitol over a two year period. These
will add to the six cargoes already agreed with
Sonatrach. Gazprom are also reported to be
negotiating a direct deal. This means that Egypt
has managed to get over the final hurdle in
securing an LNG supply route. Building a
regasification terminal or chartering an FSRU is,
relatively speaking, easy. The number of un- or
under- used regas terminals highlights that. What
has proven to be harder is paying the premium
required to lure spot cargoes to a new terminal.
No doubt the current depressed LNG prices made
this process a little easier.
LPG PRODUCT___________________________________
N.W.E.
An up and down week on the propane market
saw prices dip back down to the -$70s relative to
naphtha, after an early week spike to around $50. That spike was driven by continued strength
in the East, as well as bullish sentiment regarding
tightness of supply in the North Sea for at least the
first half of February.
That sentiment very much seems to be ebbing,
although Eastern markets are still holding firm, and
there is a growing belief that a good few Houston
cargoes will remain in the west. Those that do are
now more likely to come to northwest Europe
rather than the Mediterranean, given the low
Sonatrach price of $325pmt set today.
It remains to be seen just how much this return to
the -$70s will stimulate demand from the
petrochemical sector, or if they will hold out in the
expectation of further bearish movements. With
little demand as yet appearing from distributors,
and requiring a large increase in inland spot
buying, petchems remain the fallback destination
for inbound cargoes.
Perhaps countering this bearish trend will be a
lack of North Sea volumes, with production
schedules reduced in Norway for what looks like
the whole month, as well as the first confirmed
Enterprise cancellation of the year, for an endFebruary slot.
Middle East
FOB activity remained relatively thin this week, as
most players awaited February CP. Some
discussions were understood to have happened
with Aramco, but all signals indicated that they
were not a February spot seller. Details emerged
of a Japanese buyer taking an FOB but details
remained sparse as to seller and price. Otherwise
there was some FOB dates swaps being discussed
with in February for shipping optimization, but
nothing was concluded. February CP paper
peaked early in the week at $457.5/t before
easing off; February CP was set at $450 and $480/t
for C3 and C4 respectively. Looking forward,
February still looks to have some FOBs to be
placed with possibly two producers holding
second half February tonnes.
East
Following last week’s rally in Far Eastern prices,
which were in large part due to a couple of
parties bidding the market up, there was a
readjustment down at the beginning of the week
with that general downward trend continuing
throughout the week. However there was plenty
© E.A. Gibson Shipbrokers Ltd 2015
Gas Report
Week 05
of activity with several deals concluded, a
second half February propane cargo finally
traded after the bidder switched from CP related
to FEI related which at the time equated to
around $503/t. First half March cargoes were also
on the radar, with one trading outside the window
at March CP plus low $70's/t. With some delays
seen with western loading cargoes that are due
to head East, some further buying maybe
necessary to cover but time will tell. Final import
figures for Japan were in for December, and
when totalled up, show a drop of around 44,000
tons vs 2013 total. Chinese imports are currently
estimated to close to 7 Million tonnes for 2014.
Looking ahead, demand from Chinese PDH and
Petchems in the East still looks muted. PDH plants
are taking cargoes but under term contracts and
reports that one plant is down again in Feb for
one month will do little for additional buying
appetite. Petchems plants are reportedly
operating at close to 100%, but Naphtha length
should be sufficient to cover this.
29th January 2015
coming to the international market and are
seeing more tonnes lifted in smaller 20kt parcels
potentially to the detriment of VLGC stems. There
still seems to be interest in the West with a few
ships rumoured on hold but generally very little
firm activity so far whilst charterers seem happy to
watch rates adjust downwards. This week we saw
Saudi CP out with Propane at $450pmt and
Butane $480pmt. While this will not impact AG
volumes going East, prices are sufficiently
strong to continue to attract USG cargoes
to head East with prices proving more attractive
than NWE. This longer haul trade should help
support the freight market.
There are unconfirmed reports that a Panamax
VLGC has been secured by an Eastern importer
for a year at $2.8 mill pcm. Other term discussions
are continuing but with uncertainty on demand,
prices (including oil), rates etc, Charterers are
cautious.
LGC/Midsize/Handies ___________________________
VLGC___________________________________________
Baltic LPG
BLPG: $ 84.750 pmt
TCE: $ 80,638 / day
150
135
120
$ / mt
105
90
A fairly uninspiring week for the Western Handy
market has led to a lengthening position list on
both sides of the Atlantic throughout next month.
Several cross North Sea cargoes were worked
(and failed) and interest within the USG remains
flat. WOS one Handy is on subjects, the Navigator
Mars (22,000 cbm E) for petchems. If fixed the
ships is likely to go to Asia.
75
60
45
30
This week the LPG freight market reached its
inevitable ceiling. Whilst we have seen strong rises
over the last couple of weeks, this was largely
driven by an exceptionally tight tonnage list and
ample demand for early Feb loading ex AG. The
tonnage list for the second half of the month is
looking decidedly longer and cargoes thin on the
ground. As such we have seen the BLPG start to
soften, down from its 2015 peak of $87.375 on
Monday to $86.063 today, a trend we expect to
continue into the beginning of Feb. In February
we foresee only a few more Indian requirements
EOS the Baltic Gas (20,500 cbm SR) was fixed to
Reliance for a full cargo of Propane off early
February dates and is set to discharge in WC India
where she would be open 21-23 February. In
India two MGC's were fixed on subs, the IGLC
Anka and Dicle (38,000 cbm FR) to HPCL (16-17
Feb) and IOC (7th Feb) respectively. IOC are on
the market with two further enquiries, a split
cargo on 25-26 February dates ex Ruwais and a
20kt Propane cargo ex Ras Tanura on the 18th
February. Two Varun ships, Maharishi Krishnateya
(35,000 cbm FR) and (Maharishi Vamadeva 57,000
cbm FR) are due out of Dubai drydock around
20/25 February, and these will compete with
Negmar for these loadings.
The Eletson owned Tilos (35,000 cbm FR) has been
extended to BPCL for a further 12 months at a rate
believed to be around $1,050,000 pcm.
© E.A. Gibson Shipbrokers Ltd 2015
Gas Report
Week 05
In other news, reports are circulating that
Transammonia have managed to secure
two 38,000 cbm FR newbuildings from KSS on 10
year timecharters at a rate believed to be around
$690,000 pcm. The vessels are set to be delivered
by Hyundai Mipo during Q2 of 2016.
Coaster_________________________________________
West
Decreased activity across NWE this week with only
a few fixtures concluded, subsequently reducing
the optimism seen in previous weeks. Owners are
mainly relying on COA commitments to keep
tonnage employed, however, at time of writing
there are currently 3 to 4 vessels sitting prompt,
including trader tonnage. A spell of colder
weather and wintry conditions is predicted in
NWE, however, until this arrives we don't expect to
see any major change in the market. With this
lack of activity rates are drifting downwards and
thus the Tees to ARA rate for 1800 mts Butane is at
$37 pmt.
There is little to report from the Med as coaster
activity
is
muted,
however,
activity
is
strengthening in the Black Sea as a number of
cargoes were fixed out of the main ports for
delivery into Greece and Albania. At the moment
temperatures are above zero which is still
favouring the pressure vessels.
East
The Eastern pressurized market remains steady
and well-balanced. Prior the February CP
announcement trading activities were restrained
and the major re-exporting terminals in S.China
had less selling pressure which led to very limited
trading activity this week. The annual CFR
pressurised term tender for delivery into Haiphong
issued by PetroVietnam Gas has been withdrawn.
In China, overall discussion were mostly quoted at
Feb CP plus 90-100/mt, however, slow discussion
took place as lifting dates are uncertain due to
the Lunar New Year holiday approaching. This
week, S.China appeared stable with posted
prices at Yuan 3,760-3,950 level, whereas E.China
region posting price slid a little due to weak crude
futures which prices were quoted at Yuan 3,8004,650 level.
29th January 2015
Petchems ______________________________________
Another very disappointing week in terms of longhaul activity, across the grades. Whether this is the
direct result of the oil price slump is open to
debate. With the price stabilising in the last week
or so there is a hope that buyers and traders who
had previously held off making decisions, in the
hope of even cheaper prices during the
deflationary cycle, would now start to trade
again. Of course, much will depend on demand
both in the East and the West, however, there is a
hope that the period after the Chinese New Year
should stimulate some activity as re-stocking takes
place.
In Europe there are currently quite a few ships
sitting open, which also shows the lack of activity
in the winter LPG market, however, those Owners
with coastal petchem coa's report reasonable
activity.
In contrast, petchem activity has been more
pronounced. The rapid rise in Propylene prices has
resulted in several SE Asian origin cargoes
appearing in the market especially as it is
expected that the availability ex Taiwan will be
scarce in February. The Formosa Plastics Corp
(FPC) decision to cut down production in tandem
with the expectation that one of the Chinese PDH
plants will be shutdown throughout February has
affected the supply and demand equilibrium and
has led to the price shooting up rapidly. FPC is
now reported to be fully sold out on Propylene
until maybe mid-March so this is likely to
temporarily halt the possibility to move Propylene
long haul, despite the fact that the arb to the
west still works even with the higher Asian price.
One interesting move we have seen is a 5,000 mt
Propylene parcel ex Mai Liao Kuantan by an
unnamed trader, which we believe should be
more demand pull rather than supply push.
There is a general lack of discussion about
Ethylene this week though its derivative, VCM, has
attracted some interest. The demand for PVC has
improved which in turn has driven up the price.
The
huge
downward
correction
in the
Naphtha/Ethylene price has reduced the
production cost of traditional Ethylene based
VCM versus coal-based VCM and has resulted in
Ethylene based VCM producers ramping up their
© E.A. Gibson Shipbrokers Ltd 2015
Gas Report
Week 05
production. A healthy PVC price has encouraged
polymer producers and therefore we have seen
several spot VCM cargoes, which is rare. We
foresee this trend to continue into March, which is
welcome news for spot VCM ships within the
region.
29th January 2015
Recycling_______________________________________
Approx. price levels for LPG tonnage (LNG
tonnage will be substantially higher but will
depend on quantity/materials/weights of nonferrous metals in tanks).
A 2H February loading Butadiene parcel ex
Maptaphut was concluded earlier this week and
is expected to be shipped to East China on a
Chinese ship recently released on time charter.
Buying interest for Butadiene appears to be
healthier, however, product prices are still fairly
depressing.
India
Bangladesh
Pakistan
Turkey
China
US $430/445 per lwt
US $425/440 per lwt
US $430/440 per lwt
US $320/330 per lwt
US $250/260 per lwt
Spot Rates______________________________________
Mts
44,000
LPG
AG
Japan
4,000
5,000
3-4,000
1,600
1,500
4,000
1,800
1,800
1,600
1,800
Butadiene
Ethylene
Propylene
Propylene
Propylene
Butane
Butane
Butane
Propane
LPG
N.W.E.
USG
W.MED
Yosu
S.E.A
EC UK
Tees
Tees
Tees
S.China
USG
N.W.E.
N.W.E.
E.China
E.China
Morocco
ARA
Lisbon
Brest
Philippines
US $/pmt
$84.750
$80,638
210-220
215-225
150-160
60
143
72
37
81
60
37
vs Previous week
Up $2.562
Up $2,936
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Down $3
Down $4
Down $2
Unchanged
Time-Charter Rates (basis 12 months) ____________
Cbm
78,000+
US $/pcm
Modern
vs Previous week
US $/day
vs Previous week
1,800,000
Down
$100,000
59,178
Down
$3,288
59,000
1,700,000
Down
$100,000
55,890
Down
$3,288
35-38,000
1,050,000
Down
$50,000
34,521
Down
$1,644
20,500
S/R
1,000,000
Unchanged
32,877
Unchanged
8,000
Ethylene
515,000
Unchanged
16,932
Unchanged
5,000
Pressure
West
250,000
Unchanged
8,219
Unchanged
5,000
Pressure
East
225,000
Unchanged
7,397
Unchanged
3,500
Pressure
West
195,000
$10,000
6,411
3,500
Pressure
East
185,000
Unchanged
6,082
Down
Bunker Prices__________________________________
380cst
MDO/MGO
Rotterdam
245.5
448.5
Gibraltar
275.5
528.5
Fujairah
292.5
820
Singapore
278
477.5
Houston
267.5
560
Source: LQM Petroleum Services
© E.A. Gibson Shipbrokers Ltd 2015
Down
$329
Unchanged
Gas Report
Week 05
29th January 2015
Fixtures_________________________________________
LPG/Ethane ____________________________________
Vessel
Hellas Fos
Baltic Gas
E Ships Shamal
JS Lekv ar
Sigas Maud
Castello Di Gradara
Castel Dell Ov o
Epic Caledonia
B Gas Lanrick
Ceska
Built
2008
1994
2010
2013
2006
2009
2007
2014
1992
2003
cbm
82,000
20,500
6,500
5,000
5,000
4,000
4,000
3,500
3,200
3,000
mts
44,000
12,000
3,700
2,800
2,500
2,800
1,800
1,600
1,800
1,800
Cargo
LPG
Pro
But
But
LPG
But
I so
But
But
Pro
Load
AG
AG
Grangemouth
Faw ley
Gabes
I mmingham
Kaarsto
Fredericia
Faw ley
Tees
Disch
Far East
WC I ndia
Opts
Opts
Opts
Amsterdam
Port Jerome
Opts
Opts
Opts
Laycan
10-Feb
05-10 Feb
29-31 Jan
28-30 Jan
27-29 Jan
28-30 Jan
28-30 Jan
01-03 Feb
01-03 Feb
25-27 Jan
Rate
P.T.
RNR
P.T.
RNR
RNR
RNR
P.T.
P.T.
RNR
P.T.
Charterer
KPC
Reliance
ENI
Petredec
Litasco
I rv ing Oil
ExxonMobil
CSSA
Petredec
CSSA
Disch
Antwerp
Laycan
09-11 Feb
Rate
RNR
Charterer
CNR
Deliv ery
Redeliv ery
Laycan
AG
Mar-15
Hire
I n the region of $1.1
million pcm
Charterer
AG
Petchems______________________________________
Vessel
Gaschem Jumme
Built cbm
1993 5,200
mts
2,800
Cargo
CGP
Load
Kulev i
Period________________________________________
Vessel
Built
Tilos
2009 35,000 1 Year Extension
cbm
Period
BPCL
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