With the UK now having been in lockdown for over a month, there still seems to be little idea of when, or indeed how, we might begin to emerge from our bunkers.
In an ideal world, of course, we would simply sit tight until a vaccination or cure is readily available. Unfortunately, the development of such things takes extraordinary amounts of expertise, effort, resources and, most importantly, time. Whilst some vaccination trials are underway and look promising, these cannot be reasonably rolled-out to the general public until they are proven to be both safe and effective. In addition to this, as our readers in the manufacturing sector will appreciate, it is not easy to significantly scale up production over night.
Whilst we do have some time to play with, the economy cannot remain on hold forever. The fact that significant swathes of the planet have managed to grind to a halt at all is remarkable, but we cannot expect this to continue indefinitely. So the million dollar question is this: “how do we exit lockdown?”
Speaking to friends and colleagues (via video call – don’t worry), one phrase that starts many a sentence is “when lockdown ends”. Unfortunately, the world is unlikely to wake up to a grand announcement that everywhere is back open for business. Less romantically, but more practically, it is more likely that different sectors will slowly open their doors over a period of several months.
In Denmark, for instance, the government has allowed certain businesses, such as hairdressers, beauty salons, chiropractors, tattoo parlours and psychologists, to reopen. I’m sure that I speak for many of us when I say that my current haircut has seen better days, so at this point the news of a barbershop reopening would feel otherworldly.
The LNG industry, of course, has not escaped the tentacles of the pandemic. According to Reuters, the collapse in Asian LNG spot prices has been dramatic, and fell to US$1.95/million Btu in the week ended 24 April – the lowest price on record.1
The article goes on to say that one consequence of this collapse is that Asian LNG spot prices are now nearly as low as natural gas futures in the US, adding that: “This may to some extent be comparing apples with oranges, but it does serve to underline that the first casualty of the weakness in LNG will be US exports to Asia.”
How the US responds to this depends on a litany of factors, most notably the timespan of the lockdown. As we are all finding in day-to-day life, planning ahead is next to impossible given the uncertainty surrounding the situation.
We hope you enjoy this latest issue of LNG Industry magazine, which includes a regional report on the Mediterranean, as well as technical articles on shipping, coatings and protection, cruise shipping, tugs and towage, and LNG as a marine fuel.
If you are still working from home, why not visit our website at www.lngindustry.com and follow us on social media so that you can keep up-to-date with the latest industry news. You can also download the LNG Industry app to ensure that you continue to receive a free regular copy of the magazine, wherever you might be.
- RUSSELL, C., ‘COLUMN-Asian LNG prices take bigger coronavirus hit than Brent crude: Russell’, Reuters, (27 April 2020), https://uk.reuters.com/article/column-russell-lng-asia/column-asian-lng-prices-take-bigger-coronavirus-hit-than-brent-crude-russell-idUKL3N2CF1HK