Drewry Shipping Consultants released its latest report, “Annual LPG Market Review and Forecast 2004/05”. Drewry’s main findings make extremely positive reading for ship owners as they are finally experiencing a period of stability and growth.
Having experienced dramatic booms and busts since the turn of the century, Drewry’s report highlights how the various market segments are now performing.
The new annual review and forecast specifically identifies that small LPG carriers have enjoyed a very good start to 2004 with spot rates for LPG cargoes in Europe rising to their highest level since 1995. Drewry’s report forecasts that prospects for this sector now look better than they have done for many years.
“Our latest report on the LPG market follows a period of market decline and uncertainty at the turn of the century. It’s fantastic for ship owners to now see that 2004 is a year of stable recovery and sustained growth,” said Andrew Buckland at Drewry Shipping Consultants. “Following the first ever decline in fleet capacity in 2002, the LPG fleet grew strongly in 2003 with capacity expanding by 3.4%. In this report, we draw attention to the possibility that 2004 will see another fall in capacity if scrapping levels remain high.”
The report evaluates all the key components in the LPG mix, including such areas as:
- LPG trade patterns around the world
- Carrier fleet development by sector
- Comprehensive analysis of gas carrier neworders
and demolition sales
- Evaluation of LPG vessel values
- Trends in consumption and production of LPG, ammonia and petrochemical gases
Neworders are experiencing similar market solidity whereas freight rates are now only just realising their true market value. A raft of neworders in the final quarter meant that, according to Drewry, in terms of capacity ordered 2003 saw the second highest level of neworders in the last decade. Freight rates, on the other hand, improved in 2003 from the dismal level in 2002 but Drewry expects owners to view the year as disappointing when they look to the vastly improved earnings in other areas of shipping. So far, however, 2204 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.
Drewry’s latest expert overview of the LPG market is essential reading for producers, shipping participants, investors and observers and those requiring an informed, unbiased insight into the market forces at work.
“Annual LPG Market Review and Forecast 2004/05” is published by Drewry Shipping Consultants Ltd. Individual copies of the report are priced, including postage to any part of the world.