TANKER SHIPPING
SO FAR SO GOOD LPG MARKET • GAS TANKER OPERATORS HAVE DONE REASONABLY WELL SO FAR THIS YEAR BUT WILL THE RELATIVELY SMALL ORDERBOOK CONTINUE TO PROTECT THEM IN A TIME OF UNCERTAINTY?
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dropping by 41 per cent to 2.1m tonnes, partly once again as a result of adverse naphtha/ LPG price differentials but also because of a fall in the use of LPG as a road fuel as consumers were in lockdown. Conversely, Indian LPG imports were up by 16 per cent at 3.7m tonnes, primarily as a result of higher retail demand, especially for domestic cooking during the lockdown, and Japanese imports were also well up on the prior year.
AFTER A BARNSTORMING first quarter, when freight rates for LPG tankers across the board rose to new highs, the second quarter felt the inevitable hangover. As in other sectors, a combination of volatile and unfriendly oil and gas prices, together with a slump in end-user demand in some markets, caused a fall-off in earnings, though many half-year reports released recently show that owners are still doing pretty well. Indeed, things seem to be on an upturn since the end of the quarter,
According to data provided by BW LPG, relying on figures from IHS, total seaborne trade in LPG in the second quarter was 9 per cent below year-earlier levels, largely as a result of lower Middle East exports following oil production cutbacks designed to support crude prices. LPG exports from the Middle East were 8 per cent down on the previous year at 8.8m tonnes, while exports from North America rose by 4 per cent to 10.9m tonnes – and exports using very large gas
DEMAND PATTERNS In the short term, BW LPG expects to see US LPG production remaining high, although further out this could be reduced if oil prices stay low, discouraging further shale oil and gas development. There are signs that LPG production in the Middle East is picking up again as oil output improves. It also expects to see a recovery in LPG demand in the petrochemical sectors in Asia and Europe as prices rebalance, along with incremental
with industrial recovery in Asia and a change in price differentials once more supporting rates in all sectors.
carriers (VLGCs) were up by 7 per cent. Second quarter imports of LPG into China fell by 6 per cent compared to 2019 to 5.1m tonnes; BW LPG says retail demand has been recovering but low naphtha prices in particular have reduced demand for steam crackers. European LPG imports fell sharply,
demand in China to feed new steam cracking and propane dehydrogenation (PDH) plants. For the year as a whole, Drewry Shipping Consultants is now predicting total seaborne LPG trade of 107.3m tonnes, down from its forecast of 108.2m tonnes released in February, although both are above the 106.5m
GAS SHIP OWNERS HAVE BEEN AT THE FOREFRONT OF THE ADOPTION OF NEW TECHNOLOGIES
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