The global liquefied natural gas (LNG) market will remain oversupplied and low prices will continue to remain weak until the end of the decade at least, according to the International Energy Agency (IEA).
In its 2016 Medium-Term Gas Market Report, the IEA slashed its forecast for gas demand for the fourth consecutive year. It said that growth gas consumption would decelerate to 1.5 per cent between 2015 and 2021.
The annual report which gives a detailed analysis and five-year projections of natural gas demand, supply and trade developments, sees global demand rising by 1.5% per year by the end of the forecast period, compared with 2% projected in last year's outlook.
“We see massive quantities of LNG exports coming on line while, despite lower gas prices, demand continues to soften in traditional markets,” according to IEA Executive Director Fatih Birol. “These contradictory trends will both impact trade and keep spot gas prices under pressure,” he added.
There will also be more supply of LNG while demand growth in some major marketsweakens, resulting in major shifts in global gas trade patterns.
A weak outlook for Japan and Korea, which are the world’s top two LNG buyers also signals that new supplies will need to find other markets. China, India and ASEAN countries will likely to emerge as key buyers.
Over medium term, global LNG export capacity is forecast to increase by 45% between 2015 and 2021, 90% of which originates from the United States and Australia.
While Asian demand, including China, is forecast to increase by more than 100 billion cubic meters by 2021 the IEA said it still would not be sufficient growth to bring the market back into balance.
"Should the implementation of environmental policies be slower than expected, the expansion in Chinese gas demand would also be much slower. In this case, the oversupply in global gas markets would extend well into the 2020s," the IEA noted.
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Tyre market in Bangladesh is forecasted to grow at over 9% until 2020 on the back of growth in automobile sales, advancements in public infrastructure, and development-seeking government policies.
The government has emphasized on the road infrastructure of the country, which has been instrumental in driving vehicle sales in the country.
The tyre market reached Tk 4,750 crore last year, up from about Tk 4,000 crore in 2017, according to market insiders.
The commercial vehicle tyre segment dominates this industry with around 80% of the market share. At least 1.5 lakh pieces of tyres in the segment were sold in 2018.
In the commercial vehicle tyre segment, the MRF's market share is 30%. Apollo controls 5% of the segment, Birla 10%, CEAT 3%, and Hankook 1%. The rest 51% is controlled by non-branded Chinese tyres.
However, Bangladesh mostly lacks in tyre manufacturing setups, which leads to tyre imports from other countries as the only feasible option to meet the demand. The company largely imports tyre from China, India, Indonesia, Thailand and Japan.
Automobile and tyre sales in Bangladesh are expected to grow with the rising in purchasing power of people as well as growing investments and joint ventures of foreign market players. The country might become the exporting destination for global tyre manufacturers.
Several global tyre giants have also expressed interest in making significant investments by setting up their manufacturing units in the country.
This reflects an opportunity for local companies to set up an indigenous manufacturing base in Bangladesh and also enables foreign players to set up their localized production facilities to capture a significant market.
It can be said that, the rise in automobile sales, improvement in public infrastructure, and growth in purchasing power to drive the tyre market over the next five years.
Headline crude prices for the week beginning 14 January 2019 – Brent: US$61/b; WTI: US$51/b
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