Annual LPG Market Review and Forecast 2004 highlights that, following a highly volatile start to the 21st Century, the market has now not just stabilised but is also experiencing sustainable growth, with small LPG carriers enjoying a particularly good start to 2004. The main components researched and analysed include:
LPG trade patterns around the world
Carrier fleet development by sector
Comprehensive analysis of gas carrier new orders and demolition sales
Evaluation of LPG vessel values
Trends in consumption and production of LPG, ammonia and petrochemical gases
This analytical report identifies and examines all the elements in the LPG mix.
LPG market overview:
LPG carrier fleet
LPG costs
LPG charter market
LPG investment
LPG carrier demand/supply:
Overview of the market
LPG carrier demand
LPG carrier supply
Forecast LPG carrier fleet
Owners Fleet characteristics
LPG carrier costs:
A summary and introduction to ship costs
Finance and company news
Newbuilding market
S&P market
Demolition market
Economic overview
Operating and voyage costs
Legislation, environment and shipping news
Small is beautiful… but size still matters for owners
The latest expert overview of the LPG market from addresses the key issues facing producers, shipping participants, investors and observers.
Rates for small gas carriers usually rise in winter but with an almost non-existent orderbook and plenty of elderly vessels approaching the end of their working lives, this sector is poised to enjoy sustained growth.
The LPG fleet bounced back in 2003 with a 3.4% increase in capacity following a fall in 2002 in which fleet capacity declined for the first time. However, if high scrapping levels continue 2004 could see another fall.
Freight rates, which also experienced a dismal 2002, recovered some ground in 2003 and owners should look to 2004 as the year that they get back on track.
Main findings :
This special report from provides an independent and detailed assessment of the LPG market. The latest expert overview from it follows a period of marked decline and uncertainty at the turn of the century yet highlights 2004 as the year of stable recovery and sustained growth.
Fleet :
Following the first ever decline in fleet capacity in 2002 the LPG fleet grew strongly in 2003 with capacity expanding by 3.4%. It draws attention to the current delivery schedule, assuming no further sales for demolition, and concludes that the fleet will expand by 0.7% in capacity terms during 2004 whilst current scheduled deliveries imply 3.2% fleet growth in 2005, 3.9% in 2006 and 3.2% in 2007.
New orders :
A flurry of Vlgc orders in the final quarter meant that in terms of capacity ordered 2003 saw the second highest level of new orders in the last decade. In total 24 new LPG carriers were ordered in 2003, double the amount in 2002 and almost treble the capacity. The New Year has carried on in an even more spectacular style with orders for 16 new LPG carriers in the first five months, 10 of which were for Vlgcs (including four for AP Moller).
Freight rates :
Freight rates improved in 2003 from the dismal level in 2002 but owners will still view the year as disappointing when they look to the vastly improved earnings in other areas of shipping. So far 2004 looks far more promising for owners with Vlgcs above a respectable $30/mt AG-Japan and small LPG carriers enjoying their best rates since 1995.
Trade :
There was a stark contrast between the Far East and the USA in the development of trade in 2003. USA LPG imports were up 25% in 2003 to 8.92m tonnes and ammonia imports were up 22.1% 6.95m tonnes. In the Far East however, imports were down 1.5% in 2003 to 25.43m tonnes with large falls in South Korean and Taiwanese imports outweighing modest growth in Chinese and Japanese imports.
Demolition :
Sales for demolition in 2003 were slightly down on 2002 but were still at historically high levels. The explosion in prices being offered by breakers early in 2004 has also pulled a further eight aged units off the market in the first five months, including a further three Vlgcs and two Lgcs.
Outlook :
Small is beautiful. After a sustained period of poor freight rates the small gas carrier fleet has seen a significant improvement in freight rates in 2004. It believes that the market for small gas carriers is now entering a period of sustained improved rates with many reasons for optimism coming from a much improved supply side situation.
But owners still go for size. Looking at the larger vessel sizes, following the sale for demolition of the Havmann, no Lgcs or Vlgcs of 30 years of age or above are left in the current fleet. Prior to the Prestige tanker spill it was generally accepted that LPG carriers had a 30-year trading life. 25 years now looks set to become the standard trading life of an LPG ship meaning significant percentages of the current Vlgc and Lgc fleets could be scrapped in the next five years.
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