A report published by Drewry Shipping Consultants Ltd states that challenging times are ahead for the LNG shipping industry. According to the report, LNG carrier freight rates have come under pressure due to rising fleet supply and stabilising LNG demand, as Japan prepares to restart its nuclear power plants.
49 million tpy of Australian LNG cargo is anticipated to enter the market between 2015 and 2017, and this will create immediate challenges on freight rates.
Shresth Sharma, Lead LNG Shipping Analyst at Drewry, commented: “With Asian demand stabilising, contractual supply from Australian projects will substantially reduce the dependency of Asian buyers on the spot market.”
The global LNG demand is already experiencing signs of weakness, where 17% of global liquefaction capacity remained unused during 2Q15. In addition, the LNG fleet is continuing to increase, with 30 more vessels expected to be delivered in 2015, and a further 41 in 2016. However, many of these are yet to secure dedicated employment and between 30 - 40 vessels are currently sitting idle.
Read the article online at: https://www.lngindustry.com/lng-shipping/19082015/drewry-predicts-challenging-future-for-lng-shipping-1164/