• 2024 October 8 14:55

    Drewry expects 66 LNG carriers to join the fleet this year

    Drewry expects 66 LNG carriers (LNGCs) to join the fleet this year, while 94 LNGCs are scheduled to be delivered in 2025, inflating the fleet amid easing vessel demand due to limited new capacity addition. LNG shipping is poised for a balanced market, with rates to soften in 2024-25. However, the supply-demand fundamentals, harsh weather conditions and geopolitical and canal transit risks will support rates. Meanwhile, a lot hinges on the US presidential elections, sanctions on Russian LNG and European gas demand.

    LNG shipping rates in 2024 have been lower this year than the 2022-23 highs but are still healthier than the pre-2019 levels. Rates have remained flat due to subdued European demand, owing to ample inventory (93% full as of September), higher renewable and nuclear output, weak gas demand and futile revival of industrial growth.
     
    Moreover, the influx of modern carriers in 2024 in the growing pool of idle steam turbine ships has softened rates this year (at least at a macro level). However, there has been some silver lining, which has saved rates from crashing further this year. These factors are discussed below.

     Strong Asian demand due to extreme summer, along with China’s revived economic growth, boosted the role of LNG in power generation.
     Japan’s LNG imports strengthened during August-September despite the increasing role of nuclear energy in the power sector.
     Lower LNG prices supported the demand in price-sensitive countries such as India, Bangladesh and Thailand.

    The US shipped LNG to Asia via the COGH as Asian prices (despite being lower than in previous years) were at a premium over TTF, coupled with lower shipping rates. As a result, the US-Asia trade also spiked in 2024 over previous levels.
     
    All these factors have supported rates this year, and Drewry expects a similar trend to continue in 2025.

    Meanwhile, rates will improve year over year as European LNG demand recovers in 2025, absorbing the expanding fleet faster than this year. Moreover, LNG supply will also improve, with 55 mtpa of new capacity scheduled to be added next year—the majority starting in the US.
     
    Drewry is bullish on winter demand as La Nina will result in severe winters. However, Europe’s high inventory, which was 94% full as of 4 October 2024, will allow the continent to enter the season with about 100% storage well ahead of its November target. The winter contango will be at play, supporting rates in 4Q24. Thus, Drewry expects rates to reach their year-high by December.
     
    However, the robust Norwegian supply and increased renewable and nuclear output will keep LNG imports in check, with faster restocking commencing in 1Q25. Therefore, Drewry anticipates rates to strengthen in 4Q24 and rally in 1Q25, followed by a slowdown in the subsequent quarters.
     
    Several factors will influence the LNG shipping market. Any escalation in the Middle East due to the ongoing tensions and conflict could spike LNG prices and rates. Robust LNG demand from China, Japan, and South Korea will intensify the competition between Europe and Asia and support LNG rates in the winter. Increased US-Asia trade via the COGH will support LNG shipping economics.
     
    According to Drewry AIS, in 3Q24, the US accounted for 24% of total LNG shipments, while the share of Australia and Qatar was 22% and 21%, respectively.

    Although the current rates seem lower, they are healthy enough, given that the fleet is undergoing structural changes and expansion. Similarly, demand-supply fundamentals have remained steady as no new capacity has been added so far (given Artic LNG stands stalled), while European demand has been weak compared to previous years.
     
    Demolitions will pick up in 2025 as fleet supply will outpace liquefaction build-up, compelling shipowners to scrap older vessels. This will provide some respite to the ‘oversupply’ conditions. However, much of the rebalancing will occur post-2026, with massive capacity additions and higher scrapping amid increasing scrutiny over methane slippage and GHG emissions.

    Moreover, ample supply by 2027 will ease LNG prices (we expect them to be around $6-7 per MMBtu), making it affordable and accessible, boosting global LNG demand- especially in China, South and Southeast Asia, and South America.

    Thus, the growing LNG trade (given increased supply and robust demand) will absorb vessel supply at a faster pace, further rebalancing the supply-demand fundamentals. Therefore, Drewry expects LNG shipping rates to recover from 2026-27, with a surge in rates for modern 2-stroke LNGCs. Demand for these vessels will grow, especially in Europe, as stringent restrictions over GHG emissions will be implemented through the Fuel EU-Maritime and EU-Fit for 55 regulations.




2024 November 9

11:08 ZIM integrates Hoopo’s solar tracking solutions
09:52 Mexican terminal TMAZ welcomes arrival of MSC vessel

2024 November 8

18:00 Greece, Turkey to keep talking on maritime boundaries agenda
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16:25 Transnet National Ports Authority pilots usage of cleaner fuels on its tugboat fleet
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2024 November 7

18:00 Innovation Norway and Team Norway sign two agreements aimed at advancing sustainable maritime solutions
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17:16 HD KSOE receives AiP from LR and LISCR for ammonia fuel-related equipment
17:08 ClassNK granted its “ELW (HP)” notation to bulk carrier “ROYAL LAUREL”
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16:24 Provaris Energy raises A$1.5 million to support hydrogen and CO₂ initiatives
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15:46 Scandlines wins innovation award of the German mobility industry
14:33 Flex LNG agrees to amend the existing time charter agreements for the two LNG carriers
13:41 ADNOC secures 15-year sales and purchase agreement for Ruwais LNG project
13:07 Three fugitive methane detection and measurement technology companies selected for feasibility studies
12:44 Irving Shipbuilding chooses TMC for Canadian patrol ships
12:24 ADNOC awards $490 mln contract to expand world’s largest 3D seismic survey
11:59 First Damen Shrimp Trawler 2607 completes sea trials
11:13 GTT receives an order from a Korean shipyard for the tank design of a new Floating Storage Regasification Unit
10:58 Hapag-Lloyd orders 24 LNG- fuelled boxships

2024 November 6

18:00 DFDS launches a new freight ferry service between Italy and Egypt
17:34 Viking names two newest Nile River ships in Luxor
17:18 Enova grants EUR 65m to five hydrogen projects for maritime fuel in Norway
16:48 COSCO SHIPPING signed a strategic cooperation agreement with BYD
16:25 Shipyards deliver a record 410 container ships in 2024
15:28 Syngenta and Maersk extend partnership in more sustainable and innovative supply chain solutions
14:41 Ports of Szczecin and Swinoujscie post results for the first three quarters of 2024
14:18 China plans to increase low-carbon bunkering capacity at Shanghai Port to more than 1 million tonnes per year by 2030
13:44 Singapore Methanol signs MOU with Global Energy to advance bio-methanol fuel
12:23 Höegh Evi signs MoU with the port of Port-La Nouvelle to develop a floating terminal for hydrogen imports
11:59 TORM capital increase in connection with delivery of one 2015-built MR vessel
11:29 Intra-Asia сontainer shipping market outpaces global growth – Drewry
10:09 ICTSI net income up 31% to US$632.58mln in Jan-Sept 2024
09:04 Guangzhou Shipbuilding completes the annual ship delivery target
08:52 CSSC held naming ceremony for last of 10 container ships built for Seaspan

2024 November 5

18:27 RS successfully completes annual survey of the legendary nuclear-powered icebreaker LENIN
18:24 Expanded emissions rules to be implemented at California ports from January 1, 2025
17:35 COSCO Shipping launches innovative ammonia-fueled ammonia/LPG vessel design
17:19 PIL orders five more LNG dual-fuel vessels from Hudong-Zhonghua Shipbuilding
16:57 Chevron expands supply of marine lubricants to include Port Elizabeth, South Africa
16:29 EDGE Group and Fincantieri sign MoU to jointly develop underwater solutions
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13:13 Kongsberg Maritime propulsion selected for new Peruvian Navy frigate programme
12:53 ADNOC and Masdar collaborate with Microsoft to drive AI deployment and low-carbon solutions
12:24 MOL to build logistic center on Kobe's Port Island
11:19 APM Terminals announces appointment of new Managing Director for Suez Canal Container Terminal
10:42 Hapag-Lloyd christens the “Hamburg Express” in the Port of Hamburg

2024 November 4

17:27 Hapag-Lloyd christens the “Hamburg Express” in the Port of Hamburg
15:52 Paradip Port to be fully mechanised by 2030
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12:18 China's 41st Antarctic expedition begins
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2024 November 3

15:57 Babcock completes deep maintenance of Lambeth River Station