Despite the current weakness in LNG shipping rates, Drewry sustains its long-term outlook for LNG shipping and believes that the market requires more vessels than have currently been ordered, according to an LNG Forecaster report published by global shipping consultancy Drewry.
The last market peak for dual fuel diesel electric LNG vessels was in 2012, and the last 12 months has seen an 80% decline of that with spot rates staying at around $30,000 a day. The increase in vessels alongside less cargo demand is presumed to be the cause.
From 2010 to 2015, approximately 44 LNG vessels a year were ordered; however, in H1, 2016 the number of orders has declined to four.
Due to low orders, it is predicted that from 2019, fleet growth would have slowed, just as the currently under construction LNG plants come online.
Shresth Sharma, Lead LNG Shipping Analyst Drewry, said: “The reason for our optimism is that almost 125 million tonnes of capacity is currently being built and there are plans for more.
“As a majority of the supply from plants under-construction has been contracted on long-term agreements, it is likely that LNG will be traded so requiring more vessels.
“Despite a widened Panama Canal, new LNG export capacity due to come online by 2020 will require ship-owners to order an additional 65 vessels over this period to meet shipping demand.”
This news comes days after the first LNG ship has passed through the newly widened Panama Canal.
Fact File: Drewry is a leading international provider of research and consulting services to the maritime and shipping industry. Drewry serves its clients through four business units: Drewry Maritime Research, which publishes market-leading research on every key maritime sector; Drewry Maritime Advisors, supporting the needs of shipping and financial institutions; Drewry Supply Chain Advisors provides sea freight procurement support to retailers and manufacturers; and Drewry Maritime Equity Research delivers an ‘Investment Research Service’ on listed companies operating in the industry. Drewry covers and employs over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai.